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HMRC internal manual

Admin Law Manual

HM Revenue & Customs
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Extra-statutory concessions: Scope of collection and management

Interpreting the taxes legislation is part of the duties of the HMRC. Where the legislation is unclear or has minor gaps HMRC can be purposive when interpreting the legislation - this means HMRC can interpret it in the way that gives effect to what Parliament intended. Such a purposive interpretation is strictly not a concession from the law; rather it is HMRC’s understanding of what the law is. HMRC’s ability to make ESCs stems directly from the managerial discretion of C&M. There is no other power or discretion that allows the Commissioners to refrain from applying the law as enacted by Parliament. We cannot ‘untax’ by concession what Parliament clearly intended to tax.

This discretion can be exercised only by the Commissioners or those to whom they have delegated policy ownership; it cannot be exercised by Ministers or HMT colleagues.

The Commissioners must balance the duty to collect the taxes which Parliament has decided shall be paid with the principles of good management. They therefore have discretion to not collect the full amount of tax due in law where that would obtain the highest net return that is practicable having regard to the costs of collection and resources available.