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HMRC internal manual

Admin Law Manual

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HM Revenue & Customs
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Collection and Management: Legal Background

The law concerning the duties of the Commissioners for Revenue and Customs can be found in the Commissioners of Revenue and Customs Act 2005 (CRCA). Section 5 of the Act says

The Commissioners shall be responsible for

(a) the collection and management of revenue for which the Commissioners of Inland Revenue were responsible before the commencement of this section

(b) the collection and management of revenue for which the Commissioners of Customs and Excise were responsible before the commencement of this section

(c) the payment and management of tax credits

HMRC are thus responsible for the collection of tax revenues and must manage them in the most effective way to achieve the highest net return to the Exchequer. In general, this means that HMRC must apply the law correctly, and the Commissioners cannot choose to move away from this position merely because the result seems unfair or unreasonable. To move away from the strict application of the law in this way would be counter to the will of Parliament.

However, there might be circumstances where applying discretion would result in a more efficient management of the revenue, and in such cases the Commissioners can choose to do so. This discretionary power rests with the Commissioners of HMRC, and through them its officers. It cannot be exercised by ministers or other departments, including HM Treasury.

The circumstances in which the Commissioners can exercise their discretion under their powers of collection and management are set out in case law and are tightly defined. More detail on what these circumstances are can be found at ADML3400.