LSS10100 - HMRC’s duty to apply the law correctly

The Commissioners for Revenue & Customs are charged by Parliament with collecting or paying and managing all of the taxes, which were formerly the responsibility of HM Customs and Excise and the Inland Revenue, including tax credits and National Insurance. The Department has a duty to collect the correct amount of tax as required by statute and has limited powers to decide to do otherwise.

The Commissioners have some limited discretion, known as “collection and management”, under section 5 of the Commissioners for Revenue & Customs Act 2005, but can only forgo the collection of taxes in exceptional circumstances, for instance if doing so would obtain a higher net return for the national exchequer (for example, if it would cost £500 to collect tax of £50). This principle has been expressed in a number of tax cases, most notably Wilkinson-v-Commissioners of Inland Revenue in the Court of Appeal 2003.

You must read ADML1200 - Incorrect Advice to Customers: Collection and management