Foreword
I am incredibly proud of the way my colleagues have risen to the challenges created by the COVID-19 pandemic over the past year and more, pulling together to support our customers and each other.
Our immediate priority for customers during financial year 2021 to 2022 will be to continue helping them cope with the economic impact of the pandemic, through the Coronavirus Job Retention Scheme, the Self-Employment Income Support Scheme and other measures to support people while the economy recovers.
As the UK builds back better, we’ll do all we can to help businesses and individuals get back on their feet and support the economy, while ensuring the right tax revenue still comes in and protecting the system from fraudulent attack.
We’ll also carry on supporting businesses to adapt to new trading rules following the end of the UK’s transition period with the EU, so they can compete successfully in global markets.
Within HMRC, we’ll keep up momentum on creating a more inclusive workplace and, as the government’s roadmap out of lockdown cautiously progresses, we’ll do everything we can to support our people’s wellbeing, make sure they can perform well in their role, and enable more colleagues to return to the office when it is safe to do so. We’ve now opened 8 of our 13 new state-of-the-art regional centres – and we’re implementing landmark reforms to make our pay and working conditions fairer and more fitted to the department’s needs.
For us to keep delivering in the future, the way we administer tax needs to change in step with society and the economy. In this plan, we set out the next steps towards building a system that is fully digital, works closer to real-time and provides more resilience in the face of national crises like the COVID-19 pandemic.
We’ll start this work by improving the agility, resilience and security of our IT infrastructure, enhancing the UK’s customs system, implementing the next stages of Making Tax Digital, and continuing the modernisation of our working arrangements.
I’m confident HMRC will continue making a positive difference for our customers and the UK.
Jim Harra, First Permanent Secretary and Chief Executive
A. Executive summary
Vision and mission
We are the UK’s tax and customs authority. We’re here to collect the money that pays for the UK’s public services and give financial support to people. Our vision is to be a trusted, modern tax and customs department.
Our values
- We are professional
- We act with integrity
- We show respect
- We are innovative
Achieving our vision
In July 2020, HMRC and HM Treasury published a tax administration strategy Building a trusted, modern tax administration, which describes the key reforms we need to achieve our vision in relation to tax. This operational delivery plan sets out the steps we will take this year towards delivering our strategy, using new strategic objectives (listed below) that are designed to improve our resilience, effectiveness and support for taxpayers.
Our new strategic objectives
- Collect the right tax and pay out the right financial support
- Make it easy to get tax right and hard to bend or break the rules
- Maintain taxpayers’ consent through fair treatment and protect society from harm
- Make HMRC a great place to work
- Support wider government economic aims through a resilient, agile tax administration system
Our priority outcomes
HMRC’s vital purpose touches the lives of almost everyone in the UK. We collect the money that pays for roads, schools, hospitals and other public services that millions of people rely on every day. We also help families and individuals with targeted financial support, such as tax credits, Child Benefit and Tax-Free Childcare.
We’re helping the UK build back better from the coronavirus (COVID-19) pandemic with a trusted, modern tax administration system – one that is fully digital, works closer to real-time and provides more resilience in times of emergency.
Our priority outcomes, underpinning this vital purpose, are made up of the first 3 of our strategic objectives. This delivery plan sets out in detail how we will deliver these outcomes, how we will measure our success, and how we will continuously improve.
- Collect the right tax and pay out the right financial support.
- Make it easy to get tax right and hard to bend or break the rules.
- Maintain taxpayers’ consent through fair treatment and protect society from harm.
We are also supporting the delivery of the following priority outcomes led by other departments:
| Priority outcome | Lead department |
|---|---|
| Seize the opportunities of EU Exit, through creating the world’s most effective border to increase UK prosperity and enhance security. | Cabinet Office |
| Provide the best start in life through high-quality early education and childcare to raise standards and help parents to work. | Dept. for Education |
Strategic enablers
To deliver our priority outcomes – and reinforce the ambitions of the Declaration on Government Reform – we will focus on 4 key enablers:
- Workforce, Skills and Location
- Innovation, Technology and Data
- Delivery, Evaluation and Collaboration
- Sustainability
B. Introduction
1. Context: the challenge of building a trusted, modern tax administration system
The government wants to create ‘a tax system fit for the challenges and opportunities of the 21st century’. The world is changing fast, and the rapid growth of information and communications technologies and rising public expectations of world-class customer service mean that the UK can, and must, have a fully digital tax system able to support taxpayers across the full range of their needs.
The strategic importance of this goal has been highlighted by the COVID-19 pandemic. The whole of government, its programmes, policies and procurement, its infrastructure and operations, needs to become far more resilient and adaptable, including tax administration. HMRC has risen magnificently to the challenge of delivering internationally renowned business and employment support schemes, in record time and with huge efficiency. To do so we have had to deal with the constraints imposed by a tax administration system that is badly in need of reform.
The 21st century is certain to throw up further challenges, and it is vital that the UK is prepared for them. We need to learn the lessons of COVID-19, so that future governments can support people, families, businesses and jobs as quickly and effectively as possible in the face of any future human or natural disaster. There is also a huge opportunity: to use improvements to the tax system to drive up levels of innovation and productivity, in the first place among software and other tax-related service providers, and secondly within businesses and organisations themselves across the country.
At the same time, HMRC is likely to evolve as an organisation central to the UK’s national resilience and crisis response, as well as discharging our traditional role as a tax authority. For this, we need to maintain the trust and consent of taxpayers and the wider public.
There is much evidence from around the world that modernisation can help to build that trust and consent. This delivery plan sets out what we will do over the coming year to begin this transformation.
Read our tax administration strategy Building a trusted, modern tax administration.
2. Our governance and Ministerial arrangements
HMRC is a non-ministerial department established by the Commissioners for Revenue and Customs Act 2005. This ensures that our dealings with taxpayers are fair and impartial.
We are accountable to the Chancellor of the Exchequer for how we administer the tax and customs systems. The Chancellor has delegated responsibility for oversight of HMRC to the Financial Secretary to the Treasury, the Rt Hon Jesse Norman MP.
First and Second Permanent Secretaries
Our First Permanent Secretary and Chief Executive, Jim Harra, is the Principal Accounting Officer for HMRC. He is responsible for the delivery of our strategy and is accountable to Parliament for the management of our resources. He chairs our Executive Committee (ExCom) and is a member of HMRC’s Board.
Our Second Permanent Secretary and Deputy Chief Executive is Angela MacDonald.
Commissioners for Revenue and Customs
The Commissioners for Revenue and Customs Act 2005 gives the legal powers and responsibilities for managing HMRC’s day-to-day functions to Commissioners appointed by the Queen. These Commissioners are responsible for the collection and management of revenue and the payment and management of tax credits. They are also entitled to appoint Officers of Revenue and Customs.
We currently have 9 Commissioners, listed below:
Tax Assurance Commissioner
The role of Tax Assurance Commissioner was introduced by HMRC in 2012 as part of a package of measures to strengthen the governance of tax disputes. The Tax Assurance Commissioner provides assurance and transparency and has an explicit challenge role in decision-making in the largest and most sensitive disputes, and in a sample of smaller cases.
Decisions relating to the resolution of our largest and most sensitive cases are decided by a panel of at least 3 Commissioners, chaired by the Tax Assurance Commissioner, Justin Holliday.
Non-executive Directors
Our non-executive Directors bring external experience and expertise to HMRC, providing advice, challenge and scrutiny to the work of ExCom and HMRC more widely. For example, they work closely with us on specific initiatives and undertake in-depth examinations of risk. Non-executive Directors also support the effectiveness of programme boards for our most significant transformation programmes.
3. Overview of strategic risks
HMRC’s principal strategic risks are set out below, and we continue to monitor these risks throughout the year:
| Principal strategic risk | Description |
|---|---|
| Capacity, capability and engagement of our people | Ensuring our workforce has the skills, capability and working experiences to enable them and HMRC to thrive. |
| HMRC security | Ensuring that significant incidents do not impact systems, people or buildings. |
| Exploiting information | Responding effectively to the business intelligence available to us. |
| External perception / loss of trust | Being seen by stakeholders as effective, efficient and treating everyone impartially. |
| EU Exit | Managing the challenges and opportunities of the UK’s new relationships, including our ability to secure revenue, make payments and meet customer needs. |
| Improving customer experience | Understanding and influencing customer behaviour in order to be a trusted, modern, healthy tax and customs department. |
| Data protection | Avoiding any loss of our information assets and ensuring compliance with Data Protection legislation. |
| Delivering the change portfolio | Delivering change to enable HMRC to deliver its strategic objectives and benefits commitments within financial allocations. |
| Funding and affordability | Achieving business plans, commitments, and strategic objectives within budget. |
4. Our resources
Our finances (excluding depreciation):
i. Departmental Expenditure Limit (DEL): £6.1 billion
ii. Resource DEL: £5.5 billion
iii. Capital DEL: £635 million
iv. Annually Managed Expenditure (AME): £57 billion
Source: Main Supply Estimates 2021 to 2022
5. Our people
As at 31 December 2020, HMRC had 58,170 full-time equivalent employees.
Source: ONS public sector employment data [Release schedule: quarterly]
Breakdown of resource by work
HMRC’s departmental finance systems are not structured to report costs and resources by priority outcome.
C. Priority Outcomes Delivery Plans
Outcome 1: Collect the right tax and pay out the right financial support.
Outcome strategy
We’ll ensure that every part of the tax and customs administration system works for the benefit of society: bringing in the revenue due under the law, reducing the tax gap, giving the right financial support and operating in a transparent and even-handed way.
Some specific commitments, to help us deliver on this priority outcome, are detailed below. These commitments reflect our major programmes and projects, including Budget announcements, manifesto commitments, and delivery of COVID-19 support schemes and EU Exit.
| Priority Outcome 1 Commitments | Description |
|---|---|
| Budget 2020 and avoidance, evasion and non-compliance | We will deliver Budget 2020 measures to tackle tax avoidance, evasion and other forms of non-compliance that will raise an additional £4.7 billion between 2020-21 and 2024-25. |
| Budget 2021 compliance measures | We are delivering a range of Budget 2021 measures to tackle non-compliance, which includes a Taxpayer Protection Taskforce to combat fraud in the COVID-19 support schemes. |
| Budget 2021 policy measures | In 2021-22, we will legislate for and implement Budget 2021 policy measures including the new super-deduction for capital allowances, extending loss carry-back as well as red diesel changes. |
| National Insurance Contributions Bill 2021 | We will deliver and manage a National Insurance Contributions (NICs) Parliamentary Bill, implementing the 2019 manifesto commitments on Freeports NICs relief and Employer NICs veterans’ holiday. |
| New anti-evasion measures | In 2021-22 we are implementing measures to tackle tax abuse in the construction sector, crack down on illicit tobacco and further measures to avoid profit-shifting by multinational companies to avoid paying taxes. |
| Manage time to pay | We will continue to support our customers to help with their finances as they recover from the pandemic, including offering ‘time to pay’, where necessary. |
| Breathing space for problem debt and the Debt Respite Scheme | We are providing a solution to allow customers with problem debt up to 60 days ‘breathing space’ from HMRC creditor actions. |
| Supporting introduction of Universal Credit | We continue to support the Department for Work and Pensions with the introduction of Universal Credit, with an eventual aim of closing the tax credits system. |
Our performance metrics
We will measure our performance, on this priority outcome, using the measures detailed below:
| Measure | Purpose of measure |
|---|---|
| Compliance yield | Compliance yield is a measure of the impact of our tax compliance activity. |
| Tax credits error and fraud | This is a measure of our effectiveness in reducing overpayments of tax credits made through error and fraud, as a proportion of paid entitlement. |
| Debt balance | The debt balance is the total debt owed to HMRC that is collectable and enforceable. |
| Tax gap | The tax gap is the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid. |
Compliance yield raised
The latest compliance yield data can be found in HMRC’s quarterly performance update.
Tackling Tax Credits error and fraud
We will publish our outturn for the year to March 2020 in our annual official statistics publication in 2021 (April 2020 to March 2021 estimates will not be available until June 2022).
Debt balance
The latest debt balance data can be found in HMRC’s quarterly performance update.
Tax gap
4.7% in 2018 to 2019 (2019 to 2020 estimates won’t be available until October 2021).
Source: HMRC official statistics [Release schedule: annually]
How our work contributes to the delivery of the UN Sustainable Development Goals (SDGs)
| Priority outcome | Link to SDGs |
|---|---|
| Priority outcome 1 |
SDG 1 – End poverty in all its forms everywhere (targets 1.2, 1.3) SDG 8 – Decent work and economic growth (target 8.1) SDG 17 – Global partnership for sustainable development (target 17.14) |
Outcome 2: Make it easy to get tax right and hard to bend or break the rules.
Outcome strategy
We’ll deliver an increasingly effortless experience for people with simple tax affairs, providing extra support for those who need it. For small businesses and agents, we’ll provide straightforward services like Making Tax Digital (MTD). For large businesses and wealthy individuals, we’ll target our approach to reflect the complexity of their tax affairs. We’ll identify risks, prevent error and make it hard to avoid or evade tax.
Some specific commitments, to help us deliver on this priority outcome, are detailed below. These commitments reflect our major programmes and projects, including Budget announcements, manifesto commitments, and delivery of COVID-19 support schemes and EU Exit.
| Priority Outcome 2 Commitments | Description |
|---|---|
| Supporting customers and making it easier to pay | We are introducing a Single Customer Record and Account that will enable taxpayers to more easily access tax services and update their records digitally. |
| Contact Engagement Programme | Under the Contact Engagement Programme, we will replace our KCOM services and introduce an intuitive user interface for our customer-facing colleagues, allowing them to deal with customer queries in a timely and accurate way. |
| Making Tax Digital for Business | We will continue to deliver Making Tax Digital (MTD), modernising tax reporting for businesses and agents and delivering a better customer experience. We will roll out MTD for VAT-registered businesses with a turnover below £85,000, who will be mandated to use MTD from April 2022. We will continue building the Income Tax Self-Assessment service, which will be mandated from April 2023 for taxpayers with business or property income over £10,000 per year. |
Our performance metrics
We will measure our performance, on this priority outcome, using the measures detailed below:
| Measure | Purpose of measure |
|---|---|
| Net Easy – phone, webchat and digital | A direct feedback measure to provide a customer view of the ease of dealing with HMRC. |
| % Telephony adviser attempts handled | A measure of HMRC’s performance in supporting our customers via our phone lines. |
| % Webchat adviser attempts handled | A measure of HMRC’s performance in supporting customers via our webchat. |
| % of customer correspondence responded to within 15 working days of receipt | A measure of HMRC’s performance in responding to post and iForms. |
Net Easy– phone, webchat and digital
The latest Net Easy score data can be found in HMRC’s quarterly performance update.
% Telephony adviser attempts handled
The latest telephony adviser attempts handled data can be found in HMRC’s quarterly performance update.
% Webchat adviser attempts handled
The latest webchat adviser attempts handled data can be found in HMRC’s quarterly performance update.
% customer correspondence turned around in 15 days
The latest customer correspondence turnaround data can be found in HMRC’s quarterly performance update.
How our work contributes to the delivery of the UN Sustainable Development Goals (SDGs):
| Priority outcome | Link to SDGs |
|---|---|
| Priority outcome 2 | SDG 8 – Decent work and economic growth (target 8.1) |
Outcome 3: Maintain taxpayers’ consent through fair treatment and protect society from harm.
Outcome strategy
We’ll be on the side of our customers when they’re trying to get things right, helping them when they need it, and ensuring a level playing field by tackling those who set out to cheat or harm the system.
Some specific commitments, to help us deliver on this priority outcome, are detailed below. These commitments reflect our major programmes and projects, including Budget announcements, manifesto commitments, and delivery of COVID-19 support schemes and EU Exit.
| Priority Outcome 3 Commitments | Description |
|---|---|
| Consolidating anti-evasion and avoidance measures and powers | In February 2021, HMRC made a number of commitments following an evaluation of how we have implemented powers and safeguards introduced since 2012. We will take further steps to ensure that our use of powers builds trust and that safeguards are effective for taxpayers. Along with making improvements to guidance, including explaining further how our safeguards operate, we will publish more data on the use of our powers and assess how the data can be used to ensure our powers are applied proportionately and fairly. |
| Tax credits underpayments | We will help customers to claim their full tax credits entitlement, so that underpayments through error are no more than 0.7%. |
| Tackling promoters of tax avoidance | We continue to tackle promoters of tax avoidance by implementing our promoters strategy, published in March 2020, including bringing forward legislation in Finance Bill 2021. |
| HMRC Charter | During 2021-22 and beyond, we will ensure our people have the skills they need to deliver the expectations set out in the new HMRC Charter. For example, we will write to customers in a clear, and courteous way. We will also ensure we signpost extra support available to customers and comply with the principles of extra support for customers who need it. These principles were published in November 2020 alongside the HMRC Charter. |
| Plastic Packaging Tax | We are on track to implement a new plastic packaging tax from April 2022, to encourage greater use of recycled plastic. |
| Sustainability targets | We aim to achieve an 85% awareness score among colleagues of our Net Zero commitment by 2022. We will also achieve a reduction in carbon emissions to support our Net Zero ambitions and our targets under the Greening Government Commitments. |
Our performance metrics
We will measure our performance, on this priority outcome, using the following measure:
| Measure | Purpose of measure |
|---|---|
| Customer satisfaction | A direct feedback measure to provide a customer view of their satisfaction of dealing with HMRC. |
Customer satisfaction (%) – phone, webchat and digital
The latest customer satisfaction data can be found in HMRC’s quarterly performance update.
How our work contributes to the delivery of the UN Sustainable Development Goals (SDGs):
| Priority outcome | Link to SDGs |
|---|---|
| Priority outcome 3 |
SDG 8 – Decent work and economic growth (target 8.1) SDG 13 – Urgent action to combat climate change (target 13.3) SDG 17 – Global partnership for sustainable development (target 17.14) |
Outcome Evaluation Plan
Our research
Our research programmes provide evidence for how we make and evaluate our policies. Our research papers, analysis publications and working papers series are available on GOV.UK.
Our Evaluation Framework
We will publish our Evaluation Framework in 2021. This framework will set out our evaluation approach and how it fits with wider government best practice guidance.
D. Strategic enablers
Workforce, Skills and Location
This strategic enabler links to the following HMRC strategic objective:
Make HMRC a great place to work
Our colleagues will feel trusted, respected and confident in their role, working in modern, inclusive environments and using improved technology, data and processes.
Some specific commitments, to help us deliver on this strategic enabler, are detailed below. These commitments reflect our major programmes and projects, including Budget announcements, manifesto commitments, and delivery of COVID-19 support schemes and EU Exit.
| Commitment | Description |
|---|---|
| Employee engagement | We will continue to improve the working experience for colleagues and make progress towards achieving the Civil Service Employee Engagement Index benchmark. |
| Equality, diversity and inclusion | By end March 2024, we will: – increase declaration rates for colleague diversity characteristics to 85% for ethnicity, disability and sexual orientation, to more accurately identify and address any inequalities – increase the diversity of HMRC’s workforce to reflect the diversity of our customers, with 15% of colleagues from a Black, Asian or minority ethnic background, 15% disabled colleagues. – increase the representation of women at SCS level to 50%. |
People survey engagement score
HMRC’s People survey engagement score shows progress towards achieving the Civil Service Employee Engagement Index benchmark.
| Year | Engagement score |
|---|---|
| 2020 | 57% |
| 2019 | 49% |
| 2018 | 49% |
Source: Civil Service People Survey [Release schedule: annually]
Representation of female, ethnic minority and disabled staff
The data in the table below represents our progress towards meeting our equality, diversity and inclusion targets set out above.
| Year | Total number of staff | Female | Ethnic minority | Disabled |
|---|---|---|---|---|
| 2020 | 62,940 | 52.8% | 14.7% | 13.5% |
| 2019 | 63,839 | 53.7% | 13.8% | 13.8% |
| 2018 | 63,950 | 54.3% | 11.9% | 13.7% |
Source: Civil Service Diversity and Inclusion Dashboard [Release schedule: quarterly]
Innovation, Technology and Data; Delivery, Evaluation and Collaboration; Sustainability
These strategic enablers link to the following HMRC strategic objective:
Support wider government economic aims through a resilient, agile tax administration system
We will achieve this strategic objective by:
1. Supporting government
We’ll apply the same innovative thinking we used during the COVID-19 emergency to how we administer the tax system. This will enable us to support wider government economic objectives by becoming an organisation that is central to our national resilience and crisis response.
2. Providing border systems to support traders
Following the new Trade and Cooperation Agreement between the UK and the EU, which came into force on 1 January 2021, we will complete the implementation of import controls on goods entering Great Britain from the EU, and the Northern Ireland Protocol.
3. Improving our technology and data
Over the next year, we are focussing on delivering sustainable improvements to our IT systems, in particular investing in our Securing Our Technical Future programme. This will deliver critical IT system updates and develop our core IT infrastructure.
To ensure that our key business systems are sustained and that working from home is effective for everyone, we are increasing our network resilience and capacity. We are also continuing to acquire, manage and use our data safely, securely and effectively.
Our Cyber Security Command Centre will continue to guard against the risk of attack, malware, insider threats and hacktivism activities, using learning from incidents to encourage service, asset and data owners to improve their overall security status.
4. Wider modernisation work
To modernise the business rates system in England and support more effective analysis and oversight of the collection of the tax, we are carrying out initial work to design and develop Digitalising Business Rates.
More broadly, we will work collaboratively across government to progress the Civil Service Modernisation and Reform agenda.
Some specific commitments, to help us deliver on this strategic enabler, are detailed below. These commitments reflect our major programmes and projects, including Budget announcements, manifesto commitments, and delivery of COVID-19 support schemes and EU Exit.
| Commitment | Description |
|---|---|
| Borders and Trade | Following the new Trade and Cooperation Agreement between the UK and the EU, coming into force on 1 January 2021, we will complete the implementation of import controls on goods entering Great Britain from the EU, and the Northern Ireland Protocol. |
| Freeports | As announced at Budget 2021, we will introduce 8 freeports in England from Autumn 2021. We are committed to working with the devolved nations to establish freeports across the UK. |
| Digitalising Business Rates | We are carrying our initial work to design and develop Digitalising Business Rates to help modernise the business rates system in England, and support more effective analysis and oversight of the collection of tax. |
| Coronavirus Job Retention Scheme | The Coronavirus Job Retention Scheme, which was due to end in April 2021, will be extended to the end of September 2021. The scheme will provide the same level of support until June 2021. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September. Employees will continue to receive 80% of their current salary, capped at £2,500 per month, for hours not worked. |
| Self-employed Income Support Scheme | The fourth grant will cover February to April 2021 and will be paid out between late April and May 2021. The fifth grant will be available to claim from July until September 2021. |
| Defer VAT payments | We will implement the VAT New Payment Scheme and extend the deadline for signing up to the scheme by 3 months, to 30 June 2021. |
| One-off payment to eligible working households | The government is making a one-off payment of £500 to working households receiving tax credits, in order to provide extra support over the next six months across the UK. |
Sustainability and environmental agenda
We are committed to supporting the government’s sustainability and environmental agenda. We administer taxes designed to support achievement of wider government environmental policy objectives, including, Aggregates Levy, Climate Change Levy, Carbon Price Support Rates and Landfill Tax. We are introducing a new tax on plastic packaging from April 2022 to encourage the use of recycled plastic (with the aim of reducing plastic landfill and incineration).
Equally important is our own role in becoming a more sustainable organisation. We are looking to achieve an 85% awareness score on internal surveys about our Net Zero commitment by 2022. We will also achieve a reduction in carbon emissions to support our Net Zero ambitions and our targets under the Greening Government Commitments.
Greenhouse gas emissions
| Year | Total emissions (thousand tonnes) |
|---|---|
| 2019 | 74,6 tonnes |
| 2018 | 88,4 tonnes |
We will publish the 2020 data when it becomes available in 2021.
Source: Greening Government Commitments annual reports [Release schedule: annually]
E. Our equality objectives
HMRC’s equality objectives are to be: inclusive, respectful and representative (contributing to SDG 5).
They apply to our work with customers, as well as an employer, and describe the actions we will take to continue embedding equality, diversity and inclusion through all our functions between 2020 and 2024.
Our equality objectives are aligned with the emerging Civil Service Inclusion Strategy.
HMRC published its equality objectives for 2020 to 2024 on 29 January 2021.
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