Corporate report

HMRC's annual report and accounts 2022 to 2023: staff and remuneration report

Published 17 July 2023

This report provides details on the size and shape of our workforce and the cost of our staff and leadership team.

HMRC is proud to reflect the nation we serve. As the UK’s third largest government department we employ over 67,500 people from all backgrounds and walks of life, working in towns and cities across the UK. In our workplaces you can expect to find customer service advisers and compliance caseworkers but also experts in data, digital technology, policy, finance and the law, along with other highly skilled professionals who make up our corporate service teams.

Some of our colleagues have devoted their entire careers to the tax and customs service, bringing decades of specialist knowledge and expertise but we also welcome thousands of new recruits every year.

Staff numbers

As an operational department, we need the right number of people in the right places to serve our customers and deliver our objectives.

Our departmental group, including the Valuation Office Agency (VOA), had 67,519 full-time equivalent (FTE) employees at the end of financial year 2022 to 2023. This included 63,738 in HMRC and 3,781 in VOA. These figures exclude Contingent Labour which was 2,274 for HMRC and 51 for VOA as of 31 March 2023.

Staff redeployments

By the end of 2022 to 2023, we had around 1,190 FTE employees funded to support the UK’s transition from the EU. These included around 1,158 full-time HMRC employees and around 32 FTE contractors and temporary employees who were directly recruited to support UK Transition work. We also had 15 full-time HMRC employees redeployed from other areas to supporting work related to the cost of living crisis.

Recruitment

This year we recruited 7,446 full-time equivalent roles to ensure we have the skills we need in our key strategic locations. This included 6,855 in HMRC, and 591 in VOA. We recruited 1,345 FTE from other government departments.

Leavers and exits

In 2022 to 2023, 4,858 full-time equivalent employees either left HMRC’s departmental group, including transfers to other government departments, or retired. This included 4,344 (8.7% turnover) in HMRC, and 514 (8% turnover) in VOA. In 2022 to 2023, the majority of RCDTS Ltd staff transferred into HMRC under Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) arrangements, with a small section moving to an external service provider.

Average number of full-time equivalent persons employed

The table below gives the average number of FTE for 2022 to 2023.

Table 18: Average number of full-time equivalent persons employed

Due to the amount of data presented, only part of the table below is visible. Please use the scollbar at the bottom of the table to view all the columns.

	Operational permanently employed staff	Capital (note 1) permanently employed staff	Operational others	Capital (note 1) others	2022-23 Total	2021-22 Total
Core department	62,356	369	508	-	63,233	59,395
Valuation Office Agency	3,391	-	349	-	3,740	3,544
Revenue and Customs Digital Technology Services Limited	134	426	12	76	648	913
Departmental group total	65,881	795	869	76	67,621	63,852

Note 1: Capital relates to staff building capital assets.

Staff costs

Our staff costs figures only include officials. The salary of the minister who has responsibility for HM Revenue and Customs is paid out of central funds and can be found in the Resource Accounts of HM Treasury.

Table 19: The costs of people employed during the year (£m)

	Permanently employed staff	Others	2022-23 Total	2021-22 Total
Wages and salaries	2,423.1	26.3	2,449.4	2,202.2
Social security costs (note 1)	266.2	1.8	268.0	222.2
Other pension costs	625.8	5.4	631.2	562.1
Sub Total	3,315.1	33.5	3,348.6	2,986.5
Less recoveries in respect of outward secondments	(4.8)	-	(4.8)	(2.7)
Total net costs	3,310.3	33.5	3,343.8	2,983.8
Recoveries in respect of outward secondments			4.8	2.7
Less net costs charged to capital budgets			(62.2)	(51.6)
Travel, subsistence and hospitality			42.0	16.5
Recruitment and training			31.4	26.5
Early severance schemes			(3.4)	4.0
Staff and related costs in Consolidated Statement of Comprehensive Net Expenditure			3,356.4	2,981.9

Note 1: Social security costs include the Apprenticeship Levy which is £12.2 million for 2022 to 2023 (2021 to 2022: £10.9 million).

Civil Service Pensions

Alongside salary, the Civil Service pension is one of the most important benefits available to HMRC employees. It provides financial security and options when an employee retires, as well as benefits for their family and loved ones.

HMRC group

Pension benefits are provided through the Civil Service pension arrangements. The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS), known as “alpha”, are unfunded multi-employer defined benefit schemes. Our share of underlying assets and liabilities is not identifiable. The scheme actuary valued the PCSPS as at 31 March 2016. Further details can be found in the resource accounts of the Cabinet Office: Civil Superannuation.

Read more on Civil Service pension arrangements at the Civil Service Pension Scheme website.

For 2022 to 2023, employers’ contributions of £625.2 million were payable to the PCSPS (2021 to 2022: £555.8 million) at one of four rates in the range 26.6% to 30.3% of pensionable earnings, based on salary bands.

The scheme actuary usually reviews employer contributions every 4 years, following a full scheme valuation (excluding 2020 due to the public service pension schemes consultation). Contribution rates are set to meet the cost of benefits accruing during 2022 to 2023, which will be paid when the member retires - it does not represent the cost of benefits paid during this period to existing pensioners. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with pensions increase legislation.

Partnership Pensions

Employees can open a partnership pension account, which is a stakeholder pension with an employer contribution. Employer contributions of £4.4 million (compared to £3.5 million in 2021 to 2022) were paid to one or more of the three appointed stakeholder pension providers. The size of employer contributions depends on the age of the employee/member and ranged from 8% to 14.75% of pensionable earnings.

Employers also match the rate of employee contributions up to a maximum of 3% of their pensionable earnings. In addition, employer contributions of £0.2 million (2021 to 2022: £0.1 million), 0.5% of pensionable pay, were payable to the PCSPS to cover the future cost of providing lump sum benefits on death in service or ill health retirement of these employees. Contributions due to the partnership pension provider at the reporting date were nil. Contributions prepaid at that date were nil.

In 2022 to 2023, 43 individuals (2021 to 2022: 33 individuals) retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £0.3 million (2021 to 2022: £0.3 million).

Valuation Office Agency

A number of the Valuation Office Agency’s employees are members of the Local Government Pension Scheme. Contributions into this scheme for 2022 to 2023 were £0.6 million (2021 to 2022: £0.6 million).

Read full information about the VOA employee contributions in the VOA annual report and accounts at the Valuation Office Agency page of GOV.UK.

Revenue and Customs Digital Technology Services Ltd

Revenue and Customs Digital Technology Services Ltd (RCDTS Ltd) has a contract-based defined contribution pension scheme, administered by Aviva plc and overseen by the RCDTS Ltd Board. Contributions into this scheme for 2022 to 2023 were £1.8 million (2021 to 2022: £2.4 million). A number of RCDTS Ltd people have contractual rights to the Principal Civil Service Pension Scheme under Fair Deal policy. RCDTS Ltd has Admitted Bodies status into the scheme, managed by the Scheme Management Executive within Cabinet Office. Contributions into this scheme for 2022 to 2023 were £0.3 million (2021 to 2022: £0.4 million).

Read details of the salary and pension benefits for members of the HMRC’s Executive Committee in the Remuneration report for senior civil servants.

Exit packages

We pay redundancy and other departure costs in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme under the Superannuation Act 1972. Exit costs are accounted for in full in the year in which the obligation becomes binding on HMRC. Where the department has agreed early retirements, those costs in excess of obligations usually met by the Civil Service Pension Scheme, are met by the department. Ill-health retirement costs are met by the pension scheme and are not included in the table.

The cost of early retirements reflects the excess cost of any payment due to the individual on retirement and, in certain circumstances, the cost associated with the increase in future liability to pay pension.

Read full details about the Valuation Office Agency (VOA) staff exit packages in the VOA annual report and accounts at the Valuation Office Agency page of GOV.UK.

Table 20: Exit packages 2022 to 2023 (note 1)

Due to the amount of data presented, only part of the table below is visible. Please use the scollbar at the bottom of the table to view all the columns.

Exit package cost band	Number of compulsory redundancies (2022-23)	Number of compulsory redundancies (2021-22)	Number of other departures agreed (2022-23)	Number of other departures agreed (2021-22)	Total number of exit packages by cost band (2022-23)	Total number of exit packages by cost band (2021-22)
<£10,000	-	2	6	39	6	41
£10,000 - £25,000	1	16	22	170	23	186
£25,000 - £50,000	-	6	58	234	58	240
£50,000 - £100,000	-	-	47	67	47	67
£100,000+	-	-	22	9	22	9
Total number of exit packages by type	1	24	155	519	156	543
Of which:
Core department and agency	1	24	155	519	156	543
Revenue and Customs Digital Technology Services Limited	-	-	-	-	-	-
Total number of exit packages by type	1	24	155	519	156	543
Total resource cost (£000s)	14	419	8,729	16,566	8,743	16,985
Of which:
Core department and agency	14	419	8,729	16,566	8,743	16,985
RCDTS Limited	-	-	-	-	-	-
Total resource cost (£000s)	14	419	8,729	16,566	8,743	16,985

Note 1: The prior year figures in the 2021 to 2022 published account showed compulsory redundancies and other departures agreed as 479 with a total resource cost of £14,306 thousand. These figures have been adjusted above to account for instances where individuals’ final costs changed from the original estimate after the date of submission of the accounts and to also include 64 cases which were originally scheduled for 2022 to 2023 but were settled in 2021 to 2022.

People off-payroll

Those described as ‘people off-payroll’ are contractors and intermediaries who are paid by HMRC for the products or services they supply but are not included in our employee payroll.

We have reviewed all relevant off-payroll engagements during 2022 to 2023. Where engagements have been within the scope of the off-payroll (IR35) legislation, we have advised both worker and the paying agency of this determination meaning appropriate deductions are made at source from payments made in respect of the engagement. No tax liabilities have been incurred or penalties imposed due to any failure to comply with IR35 legislation.

The tables below provide details of the off-payroll engagements for 2022 to 2023, including those from the Valuation Office Agency (VOA) and Revenue and Customs Digital Technology Services Limited (RCDTS).

Table 21: Temporary off-payroll worker engagements as of 31 March 2023, earning £245 a day or greater (note 1)

	HMRC	RCDTS (note 2)	VOA
Number of existing engagements as of 31 March 2023	633	-	3
Of which:
Number that have existed for less than one year at time of reporting	317	-	3
Number that have existed for between one and two years at time of reporting	168	-	-
Number that have existed for between two and three years at time of reporting	61	-	-
Number that have existed for between three and four years at time of reporting	66	-	-
Number that have existed for four or more years at time of reporting	21	-	-

Table 22: All temporary off-payroll workers engaged at any point during the year ended 31 March 2023, earning £245 per day or greater (note 1)

	HMRC	RCDTS	VOA
Number of off-payroll workers engaged during the year ended 31 March 2023	980	108	8
Of which:
Not subject to off-payroll legislation	927	102	8
Subject to off-payroll legislation and determined as in-scope of IR35	53	6	-
Subject to off-payroll legislation and determined as out-of-scope of IR35	-	-	-
Number of engagements reassessed for compliance or assurance purposes during the year	960	102	-
Of which: Number of engagements that saw a change to IR35 status following review	-	-	-

Note 1: Include engagements through umbrella companies.

Note 2: All RCDTS off-payroll engagements were terminated before 31 March 2023.

Table 23: Board members and/or senior officials with significant financial responsibility, between 1 April 2022 and 31 March 2023

	HMRC	RCDTS	VOA
Number of off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, during the financial year	-	-	-
Total number of such individuals, including both on payroll and off-payroll engagements	92	-	7

Consultancy and temporary employees

We only use professional service providers to help with specialist work – including consultancy and contingent labour (temporary workers). We limit this to when we do not have the necessary skills internally, or where an independent external expert opinion on a complex issue is required. For 2022 to 2023, external consultancy has supported a programme that is enabling us to accelerate the pace of customer service and productivity improvements.

We robustly control expenditure on consultancy via commercial governance procedures, but this has increased from £1.8 million (including VOA) in financial year 2021 to 2022 to £5 million in financial year 2022 to 2023, equating to 0.1% (VOA 1.1%) of our annual expenditure. We also continue to follow Cabinet Office guidelines to reduce the use of consultancy across central government. The main reason for the increase in contingent labour has been to support HMRC business as usual frontline processes post-COVID-19.

Table 24: Consultancy and contingent labour expenditure in accordance with HM Treasury definitions (note 1)

	Consultancy (note 2) £m (2022-23)	Contingent labour £m (2022-23)	Consultancy £m (2021-22)	Contingent labour £m (2021-22)
HMRC	2.6	184.4	0.9	170.7
VOA	2.3	2.4	0.9	1.7
RCDTS	-	8.2	-	12.6

Note 1: HMRC report contingent labour as part of contracted out services.

Note 2: Individual figures will not sum due to rounding.

Trade Union Facility Time Allocation

We recognise the Public and Commercial Services Union (PCS) and the Association of Revenue and Customs (ARC, a specialist section of the FDA specifically for HMRC) for collective bargaining and staff representation. VOA recognises Prospect and the Public and Commercial Services Union (PCS).

Trade Union Facility Time

Facility time is time off for employees who are Trade Union (TU) representatives to carry out their TU roles. TU roles may be duties or activities.

Reps are entitled to paid time off to carry out TU duties. They are not entitled to paid time off for TU activities. However, an employer can choose to pay for time off for activities.

Table 25: Total number of employees who were relevant union officials during 2022 to 2023

	Core department and agencies total
Relevant union officials
Number of Trade Union representatives employed	852
Percentage of time spent on facility time
Working hours each representative spent on facility time
0% of working hours	175
1-50% of working hours	677
51-99% of working hours (note 1)	-
Percentage of Paybill spent on facility time
Paybill refers to the total number of employees, not union representatives only
Total cost of facility time (£)	£1,789,655
Total Paybill (£)	£3,305,378,386
Facility time as a % of Paybill	0.05%

Note 1: In exceptional circumstances HMRC will allow more than 50% of working hours for facility time.

We have nothing to disclose/report in respect of the proportion of facility time spent on paid trade union activities.

Further disclosure required for the Trade Union (Facility Time Publication Requirements) Regulations 2017 will be submitted by 31 July 2023 at Public-sector trade union facility time data.

Remuneration report for senior civil servants

The Government is committed to building a Senior Civil Service (SCS) that reflects the nation it serves and that can recruit and retain specialist skills while continuing to grow world class capability. This report contains information about HMRC’s senior employees and covers our policies on salaries, bonuses and benefits in kind, as well as performance assessment and contract termination.

Remuneration policy

The Senior Civil Service is made up of senior leaders employed across government, with a common framework of terms and conditions. SCS pay and conditions are not delegated to individual departments. Our SCS performance management system is governed by the Cabinet Office and recommendations on SCS pay are provided by the independent Review Body on Senior Salaries in an annual report to the Prime Minister. The government responds to its recommendations, and the Cabinet Office sets out the approach departments must follow in SCS pay guidance. In line with Cabinet Office guidance, SCS pay and non-consolidated awards at HMRC are then decided by the Executive Committee.

Senior Civil Service (SCS) employee numbers and approved posts

As of the 31 March 2023, we have 537 SCS employees made up of 513 HMRC and 24 VOA SCS employees. The total number of SCS approved posts was 574, made up of 551 HMRC and 23 VOA SCS posts. This figure includes both filled, vacant and job shared posts.

Table 26: HMRC Senior Civil Service (SCS) employee numbers comparison

	Number at 31 March 2023	Number at 31 March 2022	Percentage change
Permanent Secretary	2	2	0%
SCS3	10	11	-9%
SCS2	68	65	5%
SCS1	423	416	2%
On loan/ secondment	10	21	-52%
Total	513	515	-0.4%

SCS structure and recruitment

There are 3 levels of senior civil servant below the posts of Permanent Secretary: Director General, Director and Deputy Director. These are underpinned by a job evaluation which assesses the demands of each job relative to others. A total of 105 HMRC and VOA SCS posts were advertised last year. Qualified individuals from both within and outside the Civil Service were appointed through level moves and promotions.

SCS performance

The performance of deputy directors and directors is moderated by directors general and the Executive Committee signs-off the overall departmental year-end performance group distribution. Performance for directors general are moderated by the Permanent Secretaries with advice from an independent observer. Performance and pay arrangements for Permanent Secretaries are managed by Cabinet Office.

Senior Civil Service base pay awards

Following the Government’s temporary public sector pay pause for 2021 to 2022, departments were permitted to make average awards of up to 3% for 2022 to 2023. This meant that for 1 April 2022, we implemented the following elements, as set out in the Cabinet Office guidance:

• increase to the minimum salary for all SCS pay ranges: £73,000 (SCS1 National); £76,500 (SCS1 London); £95,000 (SCS2); and £125,000 (SCS3)
• flat-rate base pay award: £1,820 (SCS1), £2,550 (SCS2); and £2,600 (SCS3)
• an ‘HMRC anomaly minimum’, targeting people who are paid at the bottom of the pay ranges, increasing pay to: £77,000 (SCS1 National); £80,500 (SCS1 London); £100,000 (SCS2); and £130,500 (SCS3)
• in-year non-consolidated performance bonuses for exceptional performance during 2022 to 2023 to colleagues in accordance with the criteria set out in the Cabinet Office guidance

Base pay awards were paid to all performers.

Senior Civil Service non-consolidated performance awards

Exceptional performance against objectives is rewarded through non-consolidated end-of-year and in-year performance awards. In line with Cabinet Office guidance, non-consolidated end of year and in-year performance awards are funded from an agreed allocation of 3.3% of the SCS basic paybill and subject to a pay control limit of £17,500:

• end of year non-consolidated performance awards of £6,000 (SCS1), £9,000 (SCS2) and £12,000 (SCS3) were paid to 129 ‘Top’ performing colleagues on 1 April 2022, for the 2021 to 2022 performance year
• in-year awards ranging from £500 to £2,000 have been paid to 290 SCS members based on performance from April 2022 to March 2023

Awards that are above and beyond the control limit of £17,500 are agreed in non-standard contracts, in line with the HM Treasury senior pay approval process. Non-consolidated performance award decisions are monitored to guard against bias or discrimination.

Policy on notice periods and termination payments for the Senior Civil Service

We follow standard policy for SCS notice periods and termination payments in the Civil Service Management Code.

Service contracts

There is a legal requirement that all Civil Service appointments must be made on merit, and on the basis of fair and open competition. Recruitment principles published by the Civil Service Commission explain the limited circumstances when other appointments can be made. Executive members hold open-ended appointments, unless otherwise stated in the governance statement. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service compensation scheme. No compensation payments were made to Executive Committee members during 2022 to 2023.

Read Civil Service Commission recruitment principles at the Civil Service Commission website.

Executive Committee (ExCom) and non-executive members remuneration and pension benefits

The following table provides details of salaries and pension entitlements of the department’s most senior officials.

Details of job roles and terms of appointment can be found in the Governance statement.

Pension figures show pension earned in PCSPS or CSOPS (alpha) as appropriate.

Where the official has benefits in both PCSPS and alpha the figure is the combined value of benefits in the 2 schemes – but part of the pension may be payable from different ages. The accrued pension is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age.

Table 27: Senior officials’ single total figure of remuneration and pension benefits

Due to the amount of data presented, only part of the table below is visible. Please use the scollbar at the bottom of the table to view all the columns.

Senior officials	Salary (full year equivalent) (£000) 2022-23	Salary (full year equivalent) (£000) 2021-22	Bonus payments (£000) 2022-23	Bonus payments (£000) 2021-22	Benefits in kind (to the nearest £100) 2022-23	Benefits in kind (to the nearest £100) 2021-22	Pension benefits (to the nearest £000) 2022-23	Pension benefits (to the nearest £000) 2021-22	Total (£000) 2022-23	Total (£000) 2021-22	Pension scheme	Accrued annual pension at pension age and related lump sum (£000) as at 31 March 2023 (note 8)	Real increase in pension and related lump sum at pension age (£000)	Cash Equivalent Transfer Value (CETV) (to the nearest £000) as at 31 March 2023 (note 8)	Cash Equivalent Transfer Value (CETV) (to the nearest £000) as at 31 March 2022 (note 9)	Cash Equivalent Transfer Value (CETV) (to the nearest £000) Real increase	Employer contribution to partnership pension account (to the nearest £100)
Jim Harra	185–190	180-185	-	15-20	200	-	-	-	185–190	200-205	Partnership Pension Account	-	-	-	-	-	27,600
Angela MacDonald	150–155	145-150	-	-	-	-	59	59	210–215	205-210	Alpha	40-45	2.5-5	552	481	32	-
Penny Ciniewicz	140-145	140-145	-	-	100	-	-	82	140-145	145-150	-	-	-	-	1,040 (note 1)	-	-
Sophie Dean (note 2)	15-20 (note 3) (90-95)	90-95	5–10	5-10	-	-	11	26	35-40	125-130	Alpha	30-35	0-2.5	467	453	7	-
Katherine Green (note 2)	10-15 (note 3) (90-95)	90-95	5-10	5-10	-	-	2	22	20-25	120-125	Alpha	30 - 35 plus a lump sum of 55 - 60	0 - 2.5 plus a lump sum of 0	487	480	-	-
Alan Evans	140-145	140-145	10-15	10-15	-	-	-3 (note 4)	28	150-155	180-185	Alpha	75-80	0-2.5	1,383	1,255	-22	-
Justin Holliday	165-170	165-170	-	0-5	100	–	-10 (note 4)	40	155-160	210-215	Alpha	85-90	0-2.5	1,416	1,296	-31	-
Myrtle Lloyd	130-135	120-125	-	-	-	-	22	89	150-155	210-215	Alpha	45-50	0-2.5	733	653	3	-
Joanna Rowland	145-150	125-130	-	10-15	-	-	14	51	155-160	190-195	Alpha	45-50	0-2.5	572	513	2	-
Daljit Rehal	200-205	195-200	40-45	35-40	-	-	78	77	320-325	315-320	Alpha	10-15	2.5-5	174	100	51	-
Jonathan Russell	130-135	115-120	0-5	5-10	-	-	-	-	130-135	125-130	Partnership Pension Account	-	-	-	-	-	23,200
Carol Bristow (note 5)	105-110 (120-125)	-	10–15 (note 5)	-	200	-	49	-	170-175	-	Alpha	60-65	2.5-5	1,096	950	36	-
Esther Wallington	110-115 (note 6)	125-130 (note 6)	-	-	-	-	45	49	155–160	170-175	Alpha	35-40	2.5-5	434	384	21	-
Jonathan Athow	130-135	60-65 (125-130)	0-5	-	200	-	-	-12	130-135	45-50	Partnership Pension Account	-	-	-	796 (note 10)	-	17,600 (note 10)
Suzanne Newton (note 7)	10-15 (120-125)	-	-	-	-	-	2	-	15-20	-	Alpha	50-55	0-2.5	721	714	-	-

Note 1: Opted out of pension scheme.

Note 2: Left ExCom. Katherine Green on 20 May 2022 and Sophie Dean on 31 May 2022.

Note 3: The full-time full year equivalent salary is £125,000-£130,000 (2021 to 2022 £125,000-£130,000). Sophie Dean and Katherine Green job shared, working part-time hours (0.7 FTE each).

Note 4: Where there is no or a small pay rise, the increase in pension due to extra service may not be sufficient to offset the inflation increase – that is, in real terms, the pension value can reduce, hence the negative values.

Note 5: Joined ExCom on 15 May 2022. Some of the bonus relates to prior director role for performance in 2021 to 2022.

Note 6: The full-time equivalent salary is £140,000-£145,000 (2021 to 2022: £140,000-£145,000). Esther worked part-time hours 0.9 FTE until September 2022. Since October 2022 she now works 0.7 FTE.

Note 7: Joined ExCom on 20 February 2023.

Note 8: Unless stated otherwise, values reported are as at 31 March 2023 or the date the individual ceased to be a member of ExCom where earlier.

Note 9: Unless stated otherwise, values reported are as at 31 March 2022 or the day before the individual was appointed to ExCom where later.

Note 10: Opted out of alpha pension scheme and joined the Partnership Pension Account.

Explanatory notes for tables 27 and 28

Salary

Salary covers both pensionable and non-pensionable amounts and includes gross salary, overtime, recruitment and retention allowances, reserved rights to other allowances and any other allowance that is subject to UK taxation.

Bonus payments

Bonus payments are paid while serving on ExCom for exceptional work in the performance year. Year-end performance awards are based on performance achieved in post(s) held in the previous year and are made as part of the performance and pay award process. Bonus payments are considered non-consolidated pay awards.

Benefits in kind

The monetary value of benefits in kind covers any benefits provided by HMRC and treated as taxable, such as hospitality provided at external development events.

Pension benefits

Pension Benefits accrued during the reporting period are calculated as follows:

Real increase in pension x 20

add Real increase in any lump sum

less Contributions made by the individual

= The value of pension benefits accrued during the period

The real increases exclude increases due to inflation or any increases or decreases due to the transfer of pension rights. The value of pension benefits can vary from year to year, due to things like the date that an individual joined or left, or an individual receiving a higher pay increase in one year to another.

Cash equivalent transfer values

The Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV payment is made by a pension scheme (or arrangement) when a member leaves a scheme and chooses to transfer the pension benefit they have accrued in that scheme to secure pension benefits in another pension scheme (or arrangement).

The value shown relates to the benefits the individual has accrued because of their membership of the pension scheme, not just their service in a senior capacity. CETVs are calculated in accordance with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax, which may be due when pension benefits are taken.

CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2023. HM Treasury published updated guidance on 27 April 2023; this guidance will be used in the calculation of 2023 to 2024 CETV figures.

Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Non-executive directors’ single total figure of remuneration

The fees of the external appointees, which include any other allowance that is subject to UK taxation, are detailed below. Details of job roles and terms of appointment can be found in the Governance statement.

Table 28: Non-executive directors’ single total figure of remuneration

	Fees (full year equivalent) (£000) 2022-23	Fees (full year equivalent) (£000) 2021-22	Benefits in kind (to the nearest £100) 2022-23	Benefits in kind (to the nearest £100) 2021-22	Total (£000) 2022-23	Total (£000) 2021-22
Dame Jayne-Anne Gadhia	25-30	25-30	-	-	25-30	25-30
David Cooper	20-25	15-20 (15-20)	-	-	20-25	15-20
Patricia Gallan	20-25	20-25	-	-	20-25	20-25
Michael Hearty	25-30	25-30	-	-	25-30	25-30
Alice Maynard (note 1), (note 2)	05-10 (20-25)	25-30	-	-	05-10	25-30
Paul Morton	15-20	15-20	-	-	15-20	15-20
Juliette Scott	20-25	20-25	-	-	20-25	20-25
Elizabeth Fullerton-Rome	15-20	15-20	-	-	15-20	15-20
Thomas Taylor	15-20	15-20	-	-	15-20	15-20
Jennifer Tippin (note 3)	0-5 (15-20)	-	-	-	05-10	-

Note 1: Fees incorporate the cost of a support worker as a reasonable adjustment under the Equality Act 2010.

Note 2: Left the department on 30 June 2022.

Note 3: Joined the department on 9 January 2023.

Fair pay

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the lower quartile, median and upper quartile remuneration of the organisation’s workforce.

The banded remuneration of the highest-paid director in HMRC and VOA in the financial year 2022 to 2023 was £240,000 - £245,000 (2021 to 2022, £235,000 - £240,000) (table 27). This was 7.4 times (2021 to 2022, 7.7) the median remuneration of the workforce, which was £32,597 (2021 to 2022, £30,751).

In 2021 to 2022 and 2022 to 2023 no employees received remuneration in excess of the highest paid director. Remuneration ranged from £22,524 to £245,000 (2021 to 2022 £21,249 to £240,000).

Total remuneration includes salary, non-consolidated performance-related pay and benefits-in-kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

Table 29a: Pay ratio

	25th percentile pay ratio	Median pay ratio	75th percentile pay ratio
2022-23	10.75	7.44	5.76
2021-22	10.75	7.72	5.91

Table 29b: Total pay and benefits and salary component for the employees at the 25th percentile, median and 75th percentile

Due to the amount of data presented, only part of the table below is visible. Please use the scollbar at the bottom of the table to view all the columns.

	Total pay and benefits (25th percentile pay)	Salary component (25th percentile pay)	Total pay and benefits (Median pay)	Salary component (Median pay)	Total pay and benefits (75th percentile pay)	Salary component (75th percentile pay)
2022-23	£22,564	£22,524	£32,597	£32,537	£42,077	£42,057
2021-22	£22,084	£22,084	£30,751	£30,751	£40,175	£40,175

In 2022 to 2023 the final pay award of 5% under Pay and Contract Reform was made in June to staff in grades AA to G6. The highest paid directors’ total remuneration only increased by 1.2%. In February 2023 around 600 RCDTS Ltd staff were transferred into HMRC. These factors have resulted in the ratio between the median/75th percentile and the highest paid director reducing during 2022 to 2023.

Table 29c: Annual percentage change in remuneration of directors and employees

	Percentage change from prior year	Salary and allowances	Performance pay and bonuses payable	Total remuneration
2021-22 / 2022-23	Highest paid director	1.3%	0.6%	1.2%
	Employees	5.8%	-0.3%	5.8%

The table above shows the percentage change in both the highest paid director and employees salary and allowances, performance pay and bonuses payable and non-cash benefits between 2021 to 2022 and 2022 to 2023.

Jim Harra
Accounting Officer
6 July 2023