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The Merger of Customs & Excise and the Inland Revenue

The Merger of Customs & Excise and the Inland Revenue
Author: Great Britain. Parliament. House of Commons. Treasury Committee
Publisher: The Stationery Office
Total Pages: 104
Release: 2004
Genre: Customs administration
ISBN: 9780215020239

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The Government has announced its intention to merge the Inland Revenue and HM Customs and Excise departments into a single department, to be called HM Revenue and Customs, in line with the recommendations of the O'Donnell report ('Financing Britain's future: review of the Revenue departments, Cm 6163; ISBN 0101616325) published in March 2004. The Committee's report examines the case for merger; expected costs and benefits; risks; legislation: confidentiality and powers of the new department; tax policy-making; and ministerial accountability. The Committee supports the decision in principle and looks forward to a detailed analysis of expected costs and benefits being carried out as soon as practicable, and also supports the introduction of new accountability arrangements. However, the fact that the Executive Chairman will report to three Treasury Ministers on various aspects of the new department's work appears unnecessarily cumbersome, and recommends that this should be reviewed in light of practice once the new department has been created.


The Control and Facilitation of Imports

The Control and Facilitation of Imports
Author: Great Britain. National Audit Office
Publisher: The Stationery Office
Total Pages: 52
Release: 2008
Genre: Business & Economics
ISBN: 9780102954272

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HM Revenue & Customs clears most imported goods quickly, and processes for submitting customs declarations and payments for non-EU imports are straightforward. The rate of physical checks at the UK border is below the EU average, however, and the number of audits of traders has dropped substantially since 2005-06. Ninety-nine per cent of declarations are processed electronically and 90 per cent of goods are cleared immediately. The Department checks documents for about 6 per cent of imports each year and aims to clear 95 per cent of these within two hours. However, a recent quality review by the Department found an 18 per cent error rate in these checks. The Department has only recently standardised the reporting of physical checks, and these reports suggest that between 2 and 3 per cent of imports get checked (The EU average is 9 per cent). The Department needs to improve its reporting, develop a standard for the minimum level of checking and undertake testing to understand compliance levels. Audits of traders fell by half for large businesses and two-fifths for small and medium businesses between 2005-06 and 2007-08. The additional revenue from this compliance work is reducing while the level of errors detected is rising, particularly among new traders. For small and medium sized businesses, the level of errors detected has increased from 32 to 39 per cent. The fragmented management of customs activities within the Department, a lack of clear accountability, and incomplete management information have hindered effective oversight of its performance and risk management.


HM Revenue & Customs' Transformation Programme

HM Revenue & Customs' Transformation Programme
Author: Great Britain. National Audit Office
Publisher: The Stationery Office
Total Pages: 40
Release: 2008
Genre: Business & Economics
ISBN: 9780102954241

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Eighteen months into an ambitious programme to transform HMRC, the Department has spent £851 million and achieved estimated benefits of £2.4 billion. These benefits are mainly from activities already underway when the programme began. Changes to funding have led the Department to revise and postpone parts of the programme, and the overall benefits expected carry high levels of uncertainty.A report out today by the National Audit Office found that most of the £11.5 billion benefits are expected to come from an increased tax yield (£6.3 billion) and transaction savings to business and government (£4.1 billion). The estimate of additional tax yield is volatile and assumes collection in full. The Department has made progress in developing its systems and processes and enhanced its project and financial management skills to deliver the programme. For most programmes it has developed governance processes and set out responsibilities for managing the projects. It delivered, as planned, one major programme in the first 18 months and has implemented parts of other programmes. It is taking action to improve implementation plans and milestones, risk management and contingency plans for some other programmes. A major driver of the programme is the Department's targets to achieve efficiency savings of 5 per cent a year. Changes in funding and content of the programme during 2007-08 delayed the completion of the business cases for individual programmes. The Department has approved business cases for 10 programmes and plans to complete the remaining three over Summer 2008. Finalising the component parts of the transformation programme is a critical step, particularly as the Department expects the funding available to peak in 2008-09 and reduce thereafter.Changing the culture of the Department to become more customer-focused is an important part of the programme. In any change programme staff satisfaction might be expected to decline and recent surveys indicate morale remains at a low ebb. The Department needs to more actively demonstrate the benefits to its staff and manage the expectations of customers as many of the improvements for them are scheduled for 2011 and beyond.


Engaging with tax agents

Engaging with tax agents
Author: Great Britain: National Audit Office
Publisher: The Stationery Office
Total Pages: 40
Release: 2010-10-13
Genre: Business & Economics
ISBN: 9780102965483

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Good tax agents, third parties paid by taxpayers to act on their behalf in their dealings with HM Revenue & Customs, help their clients get their tax right. But, self-assessed income tax returns filed by customers represented by agents are more likely to have under-declarations of tax (resulting from error, failure to take reasonable care or evasion) than returns filed by non-represented taxpayers. A key reason may be that the tax affairs agents deal with are more complex. However, analysis indicates that paying for professional help is not without risk for a taxpayer and that there might be an opportunity for HMRC to increase tax revenues by providing better support to tax agents and by better targeting of poorer ones. A three per cent reduction in the average amount of tax under-declared by represented taxpayers could lead to over £100 million extra revenue each year. At present, lack of data on individual tax agents prevents the Department's taking a tailored approach to its dealings with agents and providing feedback on performance. With better use of data, HMRC could make more targeted interventions based on risk and achieve greater value for money. HMRC has recognised the importance of developing its relationship with tax agents and has taken steps to work more effectively with this group. Initiatives have included the introduction of a priority telephone line for agents' queries on self-assessed income tax and PAYE. The Department has also encouraged tax agents to file tax returns online.


HM Revenue & Customs

HM Revenue & Customs
Author: Great Britain. National Audit Office
Publisher: The Stationery Office
Total Pages: 40
Release: 2008
Genre: Business & Economics
ISBN: 9780102954395

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Although most tax payments are made on time, around one-third are not. The level of debt in HM Revenue and Customs fluctuates on a daily basis. The difference is mainly because these systems exclude some debt that is due but is paid almost immediately and there are timing differences in when debt is downloaded from the main tax systems. This report analyses trends in debt levels using figures from the debt management systems. It examines: The Department's performance in managing debt; how the Department manages and prioritises debts; the Department's methods for collecting debt and how it encourages taxpayers to pay on time. It finds that though the Department has improved its management of tax debt, over the last year debt as a proportion of net receipts and the age of debt has increased on some taxes.


Reducing costs in HM Revenue & Customs

Reducing costs in HM Revenue & Customs
Author: Great Britain: National Audit Office
Publisher: The Stationery Office
Total Pages: 40
Release: 2011-07-20
Genre: Political Science
ISBN: 9780102969900

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HM Revenue & Customs faces a significant challenge in securing a £1.6 billion reduction in running costs over the next four years, at the same time as increasing tax revenues, improving customer service and achieving reductions in welfare payments. HMRC has reported savings of some £1.4 billion since 2005. To achieve its cost reductions it plans to implement 24 change projects and other measures including savings in the provision of IT services, improvements in productivity, reduced sickness absence and headcount reductions. The size and shape of HMRC will change substantially as it reduces staff numbers by 10,000 and significantly reduces the number of offices it operates. HMRC has established a clear vision and specified operational priorities and revenue targets. It has not yet sufficiently defined the business performance and customer service it intends to achieve by 2015. It has good information on the different costs it incurs but only limited information on the cost of its end-to-end processes and on the cost of servicing different customers groups. It also has a limited understanding of the link between the cost and value of its activities. This has restricted its ability to assess fully the impact of cost reductions on business performance. HMRC has made no allowance in its cost reduction plans for under-delivery or slippage, and currently has no reserve of proposals on which to draw. HMRC has begun to implement its cost reduction plans but has not yet assessed all the dependencies between projects and the critical path for delivery.


Core skills at

Core skills at
Author: Great Britain: National Audit Office
Publisher: The Stationery Office
Total Pages: 40
Release: 2011-12-02
Genre: Business & Economics
ISBN: 9780102976991

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HM Revenue and Customs will have to make sure its staff have the right skills if it is to succeed in cutting its running costs by 25 per cent by 2014-2015 and bringing in each year an extra £7 billion of tax revenue. It is estimated that HMRC spent £96 million in 2010-11 developing the skills of its staff but judges that spending is not systematically directed on top level business priorities. Staff skills will have been a factor in the improvement of HMRC's business results including the extra £1billion tax generated since 2010 by enforcement and compliance activity. But currently there is not a direct evidential link between results and training and development activities. Only 54 per cent of HMRC staff said that they were able to access the right learning and development opportunities when they needed to and only 38 per cent said that training had improved their performance. Evidence from a customer survey and external stakeholders also suggests that the Department does not have all the skills it needs, but HMRC does not have a good overview of its current skills gaps. It needs better data and information on gaps which would help it take a more strategic approach and gain an early warning of future skills gaps, such as the risk of skills depleting as experienced staff retire. This is of particular concern in HMRC as one in five staff in key business areas are over 55. HMRC also lacks governance arrangements or structures to hold the organization to account for money spent on training. Many of the points in this report were raised previously by HMRC's own reviews but the Department has not made the changes needed.