Her Majesty's Revenue and Customs (HMRC) is a new department of the British Government created by the merger of the Inland Revenue and Her Majesty's Customs and Excise which came into formal effect on 18 April 2005. The United Kingdom is a unitary state and a democratic constitutional monarchy. ... In the UK, the Inland Revenue is a department of the British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, inheritance tax, petroleum revenue tax, corporation tax and stamp duty. ... Her Majestys Customs and Excise (HMCE) was a department of the British Government in the UK. It was responsible for the collection of Value-added tax, Customs Duties, Excise Duties, and other indirect taxes such as Air Passenger Duty, Climate Change Levy, Insurance Premium Tax, Landfill Tax and Aggregates... April 18 is the 108th day of the year in the Gregorian calendar (109th in leap years). ... 2005 is a common year starting on Saturday of the Gregorian calendar. ...

HMRC is responsible for the collection of direct taxes (such as income tax and corporation tax), indirect taxes (such as value added tax) and some import controls, and also for national insurance contributions, and for the distribution of child benefit and some other forms of state support. A direct tax a tax that is collected directly by government from the persons (legal or natural) on which it is levied. ... Income tax is a direct tax which is levied on the income of private individuals. ... Jim Callaghan, the Chancellor of the Exchequer who introduced corporation tax in 1965. ... An indirect tax (such as sales tax, value added tax (VAT), or goods and services tax (GST)) is collected from the person who bears the tax by intermediaries and the proceeds passed on to government. ... Value added tax (VAT) is a sales tax levied on the sale of goods and services. ... National insurance is a system of taxes, and related social security benefits, that has operated in the United Kingdom since its introduction in 1911, and wider extension by the government of Clement Attlee in 1946. ... Child benefit (or childrens allowance) is a social security payment payable given to the parents or guardians of children. ...

New department

The proposed merger was announced by Chancellor of the Exchequer Gordon Brown in the Budget on 17 March 2004. The name for the new department and its first executive chairman, David Varney, were announced on 9 May 2004. Varney joined the nascent department in September 2004, and staff started moving from Somerset House and Kings Beam House into HMRC's new headquarters building at 1 Parliament Street in Whitehall on 21 November 2004. The Right Honourable Gordon Brown, PC, MP, current Chancellor of the Exchequer The Chancellor of the Exchequer is the ancient title held by the British cabinet minister whose responsibilities are akin to the posts of Minister for Finance or Secretary of the Treasury in other jurisdictions. ... This article is about the British Chancellor of the Exchequer. ... Budget generally refers to a list of all planned expenses. ... March 17 is the 76th day of the year in the Gregorian Calendar (77th in Leap years). ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... May 9 is the 129th day of the year in the Gregorian Calendar (130th in leap years). ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... Somerset House in London Somerset House is a large building situated on the south side of The Strand in central London, overlooking the River Thames, just east of Waterloo Bridge. ... Whitehall, London, looking south towards the Houses of Parliament For other places with the same name see Whitehall (disambiguation) Whitehall is a road in London, the capital of the United Kingdom, running two-thirds of the distance from Trafalgar Square towards Parliament Square; the other third constitutes Parliament Street. ... November 21 is the 325th day of the year (326th in leap years) in the Gregorian Calendar. ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ...

The planned new department was announced formally in the Queen's Speech of 2004 and a bill, the Commissioners for Revenue and Customs Bill, was introduced into the House of Commons on 24 September 2004, and received Royal Assent as the Commissioners for Revenue and Customs Act 2005 on 7 April 2005. The Act also creates a Revenue and Customs Prosecutions Office (RCPO) responsible for the prosecution of all Revenue and Customs cases. Queen Beatrix of The Netherlands reads her countrys Speech from the Throne Queen Elizabeth II reads Canadas Speech from the Throne in 1977 The Speech from the Throne, sometimes referred to by the shorter term Throne Speech, is an event in certain monarchies in which the monarch (or... A bill can be one of: paper documents used as currency (notes in British English): see Banknote. ... In some bicameral parliaments of a Westminster System, the House of Commons has historically been the name of the elected lower house. ... September 24 is the 267th day of the year (268th in leap years). ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... The granting of Royal Assent is the formal method by which a Sovereign or the Sovereigns representative in the United Kingdom and in Commonwealth Realms completes the process of the enactment of legislation by formally assenting to an Act of Parliament. ... April 7 is the 97th day of the year in the Gregorian calendar (98th in leap years). ... 2005 is a common year starting on Saturday of the Gregorian calendar. ... Criminal law (also known as penal law) is the body of law that regulates governmental sanctions (such as imprisonment and/or fines) as retaliation for crimes against the social order. ...

The Inland Revenue and Customs have very different historical bases, internal cultures and legal powers. The merger was described by the Financial Times on 9 July 2004, as "mating the C&E terrier with the IR retriever". For an interim period officers of HMRC are empowered to use existing Inland Revenue powers in relation to matters within the remit of the Inland Revenue (such as income tax, stamp duty and tax credits) and existing Customs powers in relation to matters within the remit of HMCE (such as value added tax and excise duties). However, a major review of the powers required by HMRC was announced at the time of the 2004 Pre-Budget Report on 9 December 2004, covering the suitibility of existing powers, new powers that might be required, and consolidating the existing compliance regimes for surcharges, interest, penalties and appeal, which may lead to a single, consolidated enforcement regime for all UK taxes, and a consultation document was published after the 2005 Budget on 24 March 2005. The Financial Times building The Financial Times (FT) is an international business newspaper printed on distinctive salmon pink broadsheet paper. ... July 9 is the 190th day of the year (191st in leap years) in the Gregorian Calendar, with 175 days remaining. ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... Income tax is a direct tax which is levied on the income of private individuals. ... Stamp duty is a form of tax that is levied on documents. ... This article or section should be merged with tax credit Tax credits are credits on tax payable given by the government for specific reasons. ... Value added tax (VAT) is a sales tax levied on the sale of goods and services. ... An excise is an indirect tax or duty levied on items within a country. ... December 9 is the 343rd day (344th in leap years) of the year in the Gregorian calendar. ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... March 24 is the 83rd day of the year in the Gregorian Calendar (84th in Leap years). ... 2005 is a common year starting on Saturday of the Gregorian calendar. ...

HMRC is expected to concentrate on reducing the estimated £30 billion "tax gap"—the gap between the tax that is actually paid and the tax that would be due if all tax avoidance and tax evasion were eliminated. After the Pre-Budget Report of 2 December 2004, the Inland Revenue announced measures that, according to statements the companies made to the Stock Exchange, wiped £800m off the value of Legal and General and would cost Aviva (Norwich Union) policy holders £300m, so it appears that some of this gap has already been reduced. HMRC will aim to cut underpayment of direct tax and national insurance contributions by at least £3 billion a year from the 2007/8 financial year. This article contrasts tax evasion, tax avoidance and tax mitigation. ... This article contrasts tax evasion, tax avoidance, tax resistance and tax mitigation. ... December 2 is the 336th day (337th on leap years) of the year in the Gregorian calendar. ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ... A fiscal year or financial year is a 12-month period used for calculating annual (yearly) financial reports in businesses and other organizations. ...

Efficiency gains and job cuts

As part of the Spending Review on 12 July 2004, Gordon Brown estimated that 12,500 jobs will be lost as result of the merger by March 2008(the estimate at the time of the Budget was 10,500) – around 14% of the combined headcount of Customs (around 23,000) and Inland Revenue (around 68,000). In addition, 2,500 staff will be redeployed to "front-line" activities. This will save around £300 million in staff costs, out of a total annual budget of £4 billion (by way of comparison, the Inland Revenue and Customs together collect approximately £325 billion each year). A Spending Review is a governmental process in the United Kingdom carried out by HM Treasury to set firm and fixed three-year departmental expenditure limits and, through public service agreements, define the key improvements that the public can expect from these resources. ... July 12 is the 193rd day (194th in leap years) of the year in the Gregorian Calendar, with 172 days remaining. ... 2004 is a leap year starting on Thursday of the Gregorian calendar. ...

Commentators have asked whether this level of staff reduction really amounts to job cuts rather than efficiency gains from the merger. Many Customs staff (around 7,000) are involved in investigatory activities, compared to 13,000 at the Inland Revenue. However, reductions in this area could adversely affect the tax yield: the total expected saving of staff costs is only around 0.08% of the revenue raised. The majority of the Inland Revenue staff (around 37,000) are employed in data capture and processing, but only 1,000 Customs staff perform this function. Job reductions may have been expected in this area in any event, with ever-increasing numbers of tax returns being filed on-line. Look up Tax return in Wiktionary, the free dictionary For tax returns in the United States see Tax return (United States); for tax returns in Canada see Tax return (Canada). ... Online means being connected to the Internet or another similar electronic network, like a bulletin board system. ...

The total number of job losses includes policy functions within the Inland Revenue and Customs (around 250 posts) that will move into the Treasury, so that the Treasury becomes responsible for "strategy and tax policy development" and HMRC handles "policy maintenance". In addition, certain investigatory functions (around 1,500 posts) will move to the proposed Serious Organised Crime Agency, as well as prosecutions moving to the new RCPO. The new eastern entrance to HM Treasury HM Treasury (Her/His Majestys Treasury) is the United Kingdom government department responsible for and putting into effect the UK Governments financial and economic policy. ... The creation of the Serious Organised Crime Agency (SOCA) in the United Kingdom was announced on February 9, 2004. ...

External links

• HMRC website (http://www.hmrc.gov.uk/)
• Commissioners for Revenue and Customs Act 2005 (http://www.legislation.hmso.gov.uk/acts/acts2005/20050011.htm)
• Treasury Press Release (http://www.gnn.gov.uk/content/detail.asp?ReleaseID=117153&NewsAreaID=2&NavigatedFromSearch=True) (13 May 2004)
• Treasury Press Release (http://www.gnn.gov.uk/content/detail.asp?ReleaseID=122869&NewsAreaID=2&NavigatedFromSearch=True) (12 July 2004)
• Treasury Press Release (http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2004/press_96_04.cfm) (25 November 2004)
• HM Revenue and Customs and the Taxpayer: Modernising Powers, Deterrents and Safeguards (http://www.inlandrevenue.gov.uk/consult_new/hmrc-taxpayer.pdf) (Consultation document, 24 March 2005)