Corporate report

HMRC's annual report and accounts 2023 to 2024: performance overview

Published 30 July 2024

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An overview of our performance in financial year 2023 to 2024, including information about our purpose, vision, objectives and the way we operate. Any reference to government refers to the government in place during the reporting period.

About HMRC

Our purpose and vision

HMRC is your tax service. We collect the money that pays for the UK’s public services and give financial support to people.

Our vision is to be a trusted, modern tax and customs department.

Our values

• We are professional
• We act with integrity
• We show respect
• We are innovative

Our strategic objectives

• Collect the right tax and pay out the right financial support
• Make it easy to get tax right and hard to bend or break the rules
• Maintain taxpayers’ consent through fair treatment and protect society from harm
• Make HMRC a great place to work
• Support wider government economic aims through a resilient, agile tax administration system

Our Charter

The HMRC Charter sets out the standards our customers can expect when interacting with us and the experience we want to deliver. The Charter commits us to the following:

• getting things right 
• making things easy 
• being responsive 
• treating customers fairly 
• being aware of customers’ personal situation 
• recognising that customers can appoint someone to represent them
• keeping customers’ data secure

How we are organised

Our department is made up of 4 core customer-focused groups, supported by corporate services, as set out below.

Our core customer groups

Customer groups	Purpose of customer group
Customer Services	Supports customers to pay the right tax and get the right benefits and helps those who have built up debt to pay what they owe
Customer Compliance	Ensures the right tax is paid and intervenes when there is a risk of that not happening
Borders and Trade	Supports UK international trade and the collection of taxes and duties on imports, working closely with Home Office Border Force
Customer Strategy and Tax Design	Develops and delivers policy reforms to the UK tax system to support government priorities, underpinned by high quality customer insight and analysis and working closely with HM Treasury

Our corporate services

Corporate service	Purpose of corporate service
Change Delivery Group	Manages HMRC’s change portfolio and leads delivery of the largest and most complex change programmes
Chief People Officer Group	Develops and oversees implementation of HR policies that make HMRC a great place to work, with overall responsibility for our workforce planning, recruitment, talent management, and learning activities
Chief Finance Officer Group	Includes our Finance and Commercial functions, as well as Estates and Banking services provided to HMRC and other government departments
Chief Digital and Information Officer Group	Designs, develops and runs digital and information services for our people and our customers while ensuring we hold data in a way that is secure and meets legal requirements
Solicitor’s Office and Legal Services	Provides legal services to HMRC
Communications and Guidance	Provides communications advice, support and services to HMRC and manages the provision of up-to-date, accessible guidance for HMRC’s customers and their agents. Incorporates HMRC’s Sustainability Team

As well as the groups described above, our departmental group includes the Valuation Office Agency (VOA), an executive agency which gives the government the property valuations and advice needed to support taxation and benefits.

Our departmental group had nearly 65,000 full-time equivalent employees at the end of financial year 2023 to 2024, around 61,000 in HMRC and 3,600 in the VOA.

Performance highlights: 2023 to 2024

The progress we made towards our vision of being a trusted, modern tax and customs department in 2023 to 2024.

Strategic objective 1: Collect the right tax and pay out the right financial support

£843.4bn total tax revenues – 3.6% increase on 2022 to 2023

6.9m families supported through Child Benefit

900,000+ Self Assessment customers supported
to pay debt in manageable instalments

320,000compliance interventions completed to help get taxpayers back on track

£41.8bn tax protected by tackling avoidance, evasion and error – including £13.7 billion by promoting compliance and preventing non-compliance before it occurs

Strategic objective 2: Make it easy to get tax right and hard to bend or break the rules

83.1% customers satisfied or very satisfied with our online services

69% customer interactions using 24/7 online
self-service channels – almost 6 percentage points up on 2022 to 2023

570,000 claims to Child Benefit supported using our new online service

40,000 people starting a new job helped to pay the right tax from the outset through improvements to the PAYE system

35 new interactive guidance products launched

Strategic objective 3: Maintain taxpayers’ consent through fair treatment and protect society from harm

40 tax avoidance schemes, 39 promoters and 24 connected persons publicly named

15 stop notices issued, requiring promoters to stop promoting a tax avoidance scheme

430 new criminal cases and more than 10,200 civil investigations into suspected fraud

3,629 anti-money laundering interventions

£7.6m pay arrears identified and 52,000 workers protected against underpayment of National Minimum Wage

Strategic objective 4: Make HMRC a great place to work

83% colleagues feel they are treated fairly at work

21,000+ colleagues have built skills for the future through our Digital Academy

12 modern regional centres now open, promoting innovation and collaboration

40+ other departments, agencies and public bodies using government hub space delivered by our locations programme

Strategic objective 5: Support wider government economic aims through a resilient, agile tax administration system

100% import declarations made through the Customs Declaration Service

8,200 traders using UK Internal Market Scheme between Great Britain and Northern Ireland

372 HMRC services migrated to more resilient cloud hosting up to end of 2023 to 2024

1.5bn suspicious or malicious events blocked by our cyber security team every month

£1.9bn tax revenue protected through enhanced repayment and identity verification controls

Chief Executive’s Review of 2023 to 2024

HMRC has a clear and vital purpose – to collect the money that pays for the UK’s public services and give people financial support.

When I reflect on the past financial year, I’m proud that we’ve maintained our strong track record in delivering that vital purpose. In 2023 to 2024 we generated a record £843.4 billion in tax revenue for the Exchequer – an increase of 3.6% on last year – which is spent by the government on schools, the NHS, police and other essential services we all rely on.   

We’re also continuing to keep the UK’s tax gap – the difference between the amount of tax due and the amount collected – at around the lowest level since records began in 2005 to 2006. Although international comparisons are complex, we compare favourably against other tax authorities, bringing in more than 95% of tax revenue due. And we do this at a cost of around half a penny for every pound collected.

At the UK border, we took further steps this year in building a world-class customs system, using technology, data and simplification. More than 70 million import declarations were submitted in 2023 to 2024 on our new Customs Declaration Service.

Our work is making a difference to the lives of people at home – we provided cost of living payments to over 900,000 eligible tax credits customers last year. It’s also making a difference on a global scale through our collaboration and data sharing with international partners to tackle tax crime and offshore non-compliance.

Taking action to address challenges

We are fully committed to our Charter and the standards it sets out. But this year we have faced serious challenges in delivering our customer services because of financial pressures and the need to manage a growing number of customers with complex tax affairs.

According to the latest figures from the Office for Budget Responsibility, 2.1 million people were brought into Income Tax as a result of frozen Income Tax thresholds in 2023 to 2024, with more taxpayers also having increasingly complex tax affairs. This is creating increased customer contact and new compliance risks, making it harder to meet our service standards and manage the tax gap.

We recognise the difficulties that have been experienced by many individual taxpayers, agents and small businesses when interacting with HMRC – in particular, when accessing our helplines. We’re working hard to address these challenges. Our strategy is firmly focused on how we can help more customers get their tax and customs right first time, rather than fixing problems after they happen, and on supporting more customers to self-serve using online services whenever they can.

This isn’t just good for customers, it also helps us to offer better value for money to the taxpayer. It allows us to use our customer service and compliance teams in the most efficient and productive way – and to target our resources more effectively towards those who need extra help.

As a modern tax and customs authority, we must act as stewards of the tax and customs system – enabling customers, their agents and other intermediaries to get their tax and customs right from the outset.

This is about delivering easier and more secure systems that stop error and fraud, using data in better ways to identify and manage compliance risks, and being clear with customers about what they need to do. It also means stepping in with a helping hand for those who need it, or a firm intervention to protect the Exchequer from the loss of revenue and maintain the fairness and transparency of the system.

Giving customers quicker, easier ways to manage their tax affairs

The vast majority of our customers pay their tax in full and on time, without needing us to intervene to support them or correct things. Many customers don’t need to do anything – their tax is calculated and deducted by an intermediary, such as their employer. For those who do need to take action to keep their tax affairs in order, we want to enable them to self-serve online wherever possible, improve their experience and meet their needs, within the resources available to us.

That’s why we’re continually expanding and improving our online services, so customers can resolve simple queries and manage their tax affairs quickly and easily online via GOV.UK and in the HMRC app. In 2023 to 2024, the HMRC app received 88.5 million logins by 3.8 million unique users, a growth rate of over 64% when compared with the previous year. Satisfaction with our digital services more broadly was consistently above 80%.  

This is important at a time when the volume of demand and departmental budgetary pressures mean service levels on our phones and in handling correspondence have been below our service standards. We recognise that sometimes people who need to speak to us – including the digitally excluded, the particularly vulnerable, and those with complex queries – have struggled to get the help that they need.

So, it’s right that we encourage customers to self-serve online where they can, and with our support if needed, so our advisers are freed up to focus on helping those who need our support. We made real progress in this regard during 2023 to 2024. For example, more than 1.5 million customers have used our online services to view their National Insurance number, with over 1 million viewing or saving their confirmation letter and over 490,000 saving their National Insurance number to their Apple or Google wallet. This reduces the need to call or wait for letters in the post.

We’re tackling a range of issues that confuse or worry our customers, and finding solutions to make things easier or simpler online and in the HMRC app. They’re making life simpler for many thousands of customers and helping us make best use of our resources.

To learn more about how we could target our adviser support where it’s most needed, we launched trials of an online-first approach for many customers on our Self Assessment helpline during 2023 to 2024. We saw positive results - for example, 11.5 million tax returns were filed by 31 January 2024, including 1.75 million during the 3-month closure of the Self Assessment helpline in summer 2023. This is more than in the same 3-month period in each of the previous 3 years. We also saw more customers using online services than in the previous year.

We recognise that some of our stakeholders and customers are concerned about the pace of change, however, so we didn’t go ahead with the changes to helplines we had planned in March 2024. Our helplines will continue to operate as they do now, and we’ll continue to listen to people’s concerns and make sure that we’re implementing changes at a speed and in ways that our customers are comfortable with.

Our approach has been to expand and improve our online services and promoting the benefits of these to our customers, so that our advisers can prioritise helping those customers who need us most.

Launching our online Child Benefit claims service

In May 2023 we launched a new online claims service for Child Benefit, enabling customers to receive payments in as little as 3 days after making their claim.

By the end of March 2024, our online service was used to support nearly 570,000 claims and calls regarding new claims had reduced by 51%.

Since January 2024, we have also started making things easier for new Child Benefit customers by sending a text to confirm their claim has been received, reassuring them and reducing the need for them to phone us. Although this is not yet available to all Child Benefit customers, we plan to expand the reach of this service in the future.

Transforming the UK border

We ensure that the UK’s customs system supports the smooth flow of trade, helping to deliver economic growth.

This year we supported importers to migrate to the Customs Declaration Service and extended this to exporters from March 2024, helping businesses compete successfully on the global stage and facilitating the introduction of new technologies for trade.

We also delivered the first phase of the Windsor Framework in September 2023, giving traders access to the UK Internal Market System, freeing goods that stay in the UK from unnecessary paperwork, checks, and duties. We also extended the free-to-use Trader Support Service until December 2024.

Ensuring the right tax gets paid

Modernising the tax and customs system is also about ensuring customers pay the right tax at the outset – keeping the UK’s tax gap low and providing a level playing field for people and businesses.

Our well-established compliance approach is based on doing 3 things: firstly, preventing non-compliance by improving policies, services and systems to make it easier for customers to get things right and harder to get them wrong. Secondly, promoting good compliance by supporting our customers and increasing their understanding of what they need to do. Thirdly, stepping in to correct non-compliance and help customers get their tax affairs in order, so the tax system operates fairly.

This approach helped us to collect or protect £41.8 billion of tax revenue this year, which would otherwise have been lost through error, fraud and other forms of non-compliance - exceeding our target of £40.5 billion. We delivered 34% of this from preventing non-compliance and helping customers get things right, rather than fixing problems after they had happened – an increase from previous years.

Changes like the introduction of Making Tax Digital (MTD) are vital to this. Using MTD-compatible software to keep up-to-date business records that connect to HMRC’s system is already helping over 2.2 million VAT customers keep on top of their VAT affairs, reduce errors and pay the right amount of tax from the outset.

This year, we made strong progress in our preparations for MTD for Income Tax, which will go live from April 2026 for self-employed people and landlords with annual business or property income above £50,000. We will extend the scheme to customers with income between £30,000 and £50,000 from April 2027.

Regularly updating records will not only help these income taxpayers to pay the right amount at the right time – it will also reduce the chance of mistakes, meaning less time spent trying to put things right. It will also ensure customers have up to date, accurate information to help with business planning. We have worked with stakeholders and acted on their feedback to simplify the design of MTD for Income Tax. This includes streamlining processes by removing the End of Period Statement as a formal requirement and making quarterly updates cumulative.

We understand that behind every tax bill there is a human being, and we’re committed to ensuring fairness for all in our collection of tax. We will always seek to be clear about what we expect from customers in taking responsibility for their tax affairs, and we will always help people to pay what they owe while taking account of their individual circumstances, including affordable payment plans that can stretch over any period.

Don’t Get Caught Out campaign

A key way we can help customers get their tax right first time, is by educating and prompting them towards better compliance. 

Getting advice about tax affairs can be helpful, but not all advice is good and sometimes it can lead customers into a tax avoidance scheme.

Through our ‘Don’t Get Caught Out – Tax Avoidance’ campaign, we’re encouraging customers to take steps to make sure they recognise the signs of tax avoidance, to prevent them entering into avoidance schemes.

We are expanding the campaign to include educating taxpayers on the risks of making ineligible tax refund claims – including an online tool to help people check they are eligible before they make a claim.

Delivering for the UK

There’s a lot for us to do and many risks to manage – not only the issues I’ve already outlined, but other ongoing challenges such as protecting our data and systems from attack and ensuring we have modern, resilient IT and technology in place to deliver our services.

The tax system can be complex, so we must continue to administer policies in a way that makes things as straightforward as possible for customers and recognises when there are problems to be fixed.

Many of these issues can only be addressed by working closely with customers, agents, intermediaries and other stakeholders. I’m determined that we listen carefully to their views and concerns, so we can bring everyone with us as we make the changes the system needs and build a trusted, modern tax and customs service that works for everyone and delivers for the UK.

Sir Jim Harra KCB

Chief Executive and First Permanent Secretary  
26 July 2024

Our key performance metrics

Where we have a target or service standard, this is shown in brackets.

Compliance yield

• 2023 to 2024: £41.8 billion (£40.5 billion)
• 2022 to 2023 £34.0 billion

Customer satisfaction

• 2023 to 2024: 78.6% (80%)
• 2022 to 2023: 79.2%

Customer correspondence cleared within 15 working days

• 2023 to 2024: 76.3% (80%)
• 2022 to 2023: 72.7%

Net easy

• 2023 to 2024:          +59.2 (+70)
• 2022 to 2023:          +59.8

Telephony adviser attempts handled

• 2023 to 2024: 66.4% (85%)
• 2022 to 2023: 71.1%