Committee publication · Correspondence · 7 May 2025
Correspondence from the Exchequer Secretary to the Treasury, following oral evidence on the 'Work of HMRC', dated 10 February 2025
From: Treasury Committee
Inquiry: Work of HM Revenue and Customs
Summary
The Exchequer Secretary to the Treasury responds to the Treasury Committee's follow-up questions on HMRC's governance, tax policy impacts, and operational capacity. The letter clarifies the legal framework for the ministerial Chair of the HMRC Board, details forecasts for new taxpayers (4.6 million added 2021–25; 2.9 million more by 2028–29), and reports Customer Services Group staffing at 19,698 FTE in December 2024, with plans to add 1,800 Debt Management staff and 255 FTE for other initiatives following the Autumn 2024 Budget.
Key findings
- The Exchequer Secretary's role as HMRC Board Chair carries no additional legal responsibilities beyond the statutory Commissioners for Revenue and Customs Act 2005 framework; the Board is not a decision-making body.
- 4.6 million additional taxpayers entered the system 2021–25; a further 2.9 million forecast by 2028–29, largely due to frozen Personal Allowance and state pension increases affecting pensioners and bringing new self-assessment filers into the tax system.
- HMRC Customer Services Group had 19,698 FTE staff in December 2024 (1,647 agency, 18,051 permanent). Autumn 2024 Budget funding adds 1,800 Debt Management FTE (1,200 retained, 600 newly recruited 2026–27) plus 255 FTE for Child Benefit/Tax Free Childcare fraud reduction and other measures.
- Of 14.9 million phone calls to HMRC helplines in 2023–24, 9.9 million (66%) were classified as avoidable contact; the largest avoidable category was Tax Estimate Service (1.8 million calls).
- HMRC received £45 million funding at Spending Review 2025 Phase 1 for data infrastructure, analytics, and AI tools to improve tax interventions and close the tax gap; money-laundering supervision generated £23.4 million in supervisory fee income in 2023–24, unchanged since 2019 fee levels.
Tone
ProceduralTopics
Key actors
James Murray MP, Exchequer Secretary to the Treasury, Dame Meg Hillier MP, Chair of the Treasury Committee, HMRC Commissioners, Office for Budget Responsibility (OBR), HM Treasury
Notable line
“… there are no particular additional legal implications or responsibilities for me in my role as Chair, or for the Commissioners.”
Key Quotes
“The HMRC Board provides scrutiny, challenge and support to the department on its strategy, capability, performance and risks, including reviewing and challenging operational performance and delivery of change against the department's business plan.”
“… the total number of Income Tax payers is expected to have increased by 4.6 million in 2024-25 compared to 2021-22, and is forecast to increase by a further 2.9 million by 2028-29.”
“The Customer Services Group (CSG) workforce in December 2024 was 19,698 full time equivalent (FTE) staff. This consisted of 1,647 FTE agency workers and 18,051 permanent civil servants.”
“9.9m (66%) of demand for HMRC's c ustomer service helplines (excluding Debt Management) was deemed avoidable.”
“At Spending Review 2025 Phase 1, HMRC received £45m funding for 2025-26 to improve its data and analysis capability, focussing on modernising its foundational data infrastructure, and how it acquires, stores, uses and shares data through advanced analytical and AI tools.”
Source · parliament.uk record ↗