Work of HM Revenue and Customs

Status / emerging findings

• HMRC achieved record £48bn tax yield in 2024–25 and expects to exceed it in 2025–26; tax gap falling under compliance programmes worth ~£10bn additional revenue, but delivery depends on recruiting 5,000 compliance officers by 2029–30 amid 'acknowledged risks'.
• State pension taxation policy lacks crucial implementation detail: HMRC cannot yet specify differential treatment of deferred pensioners or small occupational pension holders; full detail deferred to autumn Finance Bill.
• Significant IT and organisational change portfolio rated 'amber and on a good track' but managing high dependencies: new contact centre system, legacy data centre exit, Making Tax Digital rollout, Valuation Office Agency integration, and simultaneous Budget measures.
• Recruitment being managed 'by a small margin' with regional capacity gaps; department lacks granular data on farms vs. estates for inheritance tax enforcement, limiting ability to distinguish working farms from tax-planning vehicles.
• Constitutional tension unresolved: Exchequer Minister James Murray took HMRC Board Chair role (historically non-ministerial); no legal risk assessment conducted on implications for taxpayer confidentiality or judicial review exposure.

Why it matters

HMRC's ability to deliver £6.5bn in promised tax compliance revenue and implement complex Budget policies (state pensions, inheritance tax, winter fuel payments) directly affects public finances and millions of taxpayers; simultaneously, a serving Minister chairing an historically independent tax authority raises constitutional questions about political interference in tax administration.

Tone arc

Opened procedural under Sir Jim Harra (November 2024), shifted toward critical scrutiny of ministerial overreach when James Murray's unprecedented appointment as Board Chair was scrutinised (January 2025). Transitioned to operational anxiety across June 2025 and January 2026 sessions as Permanent Secretary John-Paul Marks repeatedly emphasised staffing constraints, data gaps, and change management risks despite headline revenue achievements.

Key witnesses

John-Paul Marks (Permanent Secretary and Chief Executive, HMRC, from September 2025), Sir Jim Harra (former Permanent Secretary, HMRC), James Murray MP (Exchequer Minister, HMRC Board Chair), Jonathan Athow (HMRC director-level), Angela MacDonald (HMRC leadership), Jayne-Anne Gadhia (former HMRC Board Chair, referenced), Dan York Smith (HMRC counsel, constitutional advice)