Rachel Reeves has appointed exchequer secretary to the Treasury James Murray as chair of HM Revenue and Customs’ board to “strengthen political accountability and delivery” – marking the first time the board has ever been chaired by a minister.
Murray, who is the minister responsible for the UK’s tax system, replaces businesswoman Dame Jayne-Anne Gadhia, who has been lead non-executive and chair of the HMRC board since November 2020. Gadhia, a former chief executive of Virgin Money, remains on the board as lead NED.
HMRC is a non-ministerial department, meaning it is run by civil servants and operates at arm’s length from ministers. This is "to ensure that the administration of the tax system is fair and impartial", according to information published on its governance.
Murray’s appointment is “to help oversee the implementation of his three strategic priorities for HMRC: closing the tax gap, modernising and reforming, and improving customer service”, the Treasury said in an announcement.
He was part of a board of experts convened by Labour in the run-up to the general election to advise on its efforts to “modernise” HMRC and improve tax compliance.
The appointment comes as part of a package of HMRC reforms announced yesterday, which include a new digital transformation roadmap and a move towards electronic invoicing.
The digital transformation roadmap, which will be published next spring, will “set out HMRC’s vision to be a digital-first organisation underpinned by customer insight”, according to the Treasury. It will include measures to ensure digital inclusion and support for customers who cannot yet interact digitally.
One of the plan's aims will be to reduce demand on HMRC phone lines, which have struggled to keep up with demand in recent years. A highly critical National Audit Office report in May found customers had spent a cumulative 798 years on hold to speak with call-centre staff in 12 months and were being "let down" by poor customer service.
As part of the package, HMRC will soon launch a consultation on e-invoicing – which can reduce administrative tasks and reduce errors in tax returns – to promote its wider use across businesses and government departments.
The consultation will gather input from businesses on how HMRC can support investment in and encourage e-invoicing uptake.
In her conference speech, Reeves said: "We will end the non-dom tax loopholes and we will crack down on tax avoidance and tax evasion. That is the difference that a Labour government will make.
"We are already delivering on that last promise to cut down on tax avoidance and tax evasion, strengthening the powers of HMRC, under the leadership of the exchequer secretary James Murray and recruiting 5,000 new tax compliance officers."
She added that "at a time of hard choices, I will not tolerate the minority who continue to avoid paying what they owe".
“That is why we will reform, modernise and invest in HMRC," she said.
“We will give it the resource it needs to go after those who are avoiding or evading tax, and we will modernise it so we have a system that is fit for purpose.”
Recruitment under way for 5,000 new hires
Reeves also used her speech to confirm that HMRC has begun making progress on a commitment to hire 5,000 more staff over the next five years.
The tax agency has issued 450 offer letters so far, with new recruits expected to join HMRC’s training programme in November, the Treasury said.
Labour’s general election manifesto made the commitment to hire 5,000 extra staff over the course of a parliament to provide increased focus on tax-compliance work. There was the full-time equivalent of 60,968 civil servants working at the department as of July, when the party was voted into power.
It said the drive would raise an extra £5bn a year in tax by 2029-30 and would fund spending pledges on the NHS and breakfast clubs for schools.
The PCS union said it welcomed the announcement that recruitment is under way and that it had requested "early discussions" with HMRC management about where new hires will added and how they will be trained and deployed.
PCS revenue and customs group secretary Steve Swainston said: "Our members in Revenue and Customs do a tremendously important job ensuring tax is collected effectively and efficiently to pay for vital public services which have been chronically underfunded by successive governments.
"The announcement of additional staff to alleviate some of the workload pressure on members is welcomed by PCS and we are confident the new recruits will play a vital role in cutting tax avoidance. PCS has been calling for additional staff to close the almost £40bn tax gap of underpaid tax for many years."