Public Service Agreement 2005 – 2008

Contents

• Introduction
• Objectives and performance targets
• Who is responsible for delivery?

Introduction

It was announced in the 2004 Budget that HM Customs and Excise and the Inland Revenue would be integrated to form a single department, HM Revenue and Customs (HMRC).

Aim - Administer the tax and customs control systems fairly and efficiently and make it as easy as possible for individuals and businesses to understand and comply with their obligations and receive their tax credit and other entitlements.

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Objectives and performance targets

Objective 1: improve the extent to which individuals and businesses pay the amount of tax due and receive the credits and payments to which they are entitled.

1. By 2007-08, reduce the scale of VAT losses to no more than 11% of the theoretical liability.
2. By 2007-08:

• reduce the illicit market share for cigarettes to no more than 13%;
• reduce the illicit market share for spirits by at least a half; and
• hold the illicit market share for oils in England, Scotland and Wales at no more than 2%.

3. PSA Target 3: By 2007-08, reduce underpayment of direct tax and National Insurance contributions due by at least £3.5 billion a year.
4. PSA Target 4: By 2007-08, increase the percentage of Self Assessment returns filed on time to at least 93%.

For the latest performance information refer to page 35 of the Spring 2007 Departmental Report (PDF 870K)

Objective 2: improve customer experience, support business and reduce the compliance burden

5. Respond accurately and completely to requests for advice:

• by 2007-08 increase to at least 80% the proportion of individuals and businesses who said they achieved success at first point of contact;
• by 2007-08 increase to at least 90% the accuracy and completeness of information and advice given and actions taken in respect of contact.

6. Provide simple processes that enable individuals and businesses to meet their responsibilities and claim their entitlements easily and at minimum cost:

• by 2007-08 increase to at least 90% the proportion of small businesses that find it easy to complete their tax returns;
• by 2007-08 demonstrate a measurable improvement in new and growing businesses’ ability to deal correctly with their tax affairs. This will include increasing the proportion of applications for VAT registration that are complete and accurate to at least 50%;
• by 2007-08 increase to at least 85% the proportion of individuals who find their SA Statements of Account, PAYE Coding Notices and Tax Credit Award Notices easy to understand.

7. Deal effectively and appropriately with information provided, so that levels of contact are kept to a minimum:

• by 2007-08 increase to at least 95% the rate of accuracy achieved in administering SA, PAYE, Tax Credits and NICs;
• by 2007-08 increase to 35% the percentage of SA tax returns received online;
• by 2007-08 increase to 50% the percentage of VAT returns filed online.

For the latest performance information refer to page 36 of the Spring 2007 Departmental Report (PDF 870K).

Objective 3: strengthen frontier protection against threats to the security, social and economic integrity and environment of the United Kingdom in a way that balances the need to maintain the UK as a competitive location in which to do business

8. By 2007-08, to improve our capability to intervene at the frontier.
9. By 2007-08, to improve our effectiveness by 50% in identifying irregularities in third country freight.
10. Maintain the extent to which importers, exporters and their agents believe we are striking the right balance between frontier protection and maintaining the UK as a competitive location in which to do business.

For the latest performance information refer to page 37 of the Spring 2007 Departmental Report (PDF 870K)

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Who is responsible for delivery?

Under existing arrangements the Boards of Inland Revenue and HM Customs and Excise are accountable to the Chancellor of the Exchequer. The Paymaster General and the Economic Secretary to the Treasury are responsible for delivering this PSA.

In Budget 2004, the Chancellor announced the creation of a single integrated tax department, HM Revenue and Customs. Once the new department has been established, ministerial responsibility for delivering this PSA will be announced.

The Paymaster General and the Economic Secretary to the Treasury are also responsible for delivering the HM Revenue and Customs contribution towards the Chancellor’s Departments agreed efficiency target set out in the Chancellor’s Departments chapter of the 2004 Spending Review White Paper.