What does section 43 of the Commissioners for Revenue and Customs Act 2005 provide?

Section 43 establishes that all expenditure incurred by the Commissioners for Revenue and Customs in connection with exercising their functions is paid from money provided by Parliament. This covers operational running costs such as staff salaries, office accommodation, technology systems, and all other administrative expenses required for HMRC to carry out its work.

Does HMRC fund its own operations from the tax revenue it collects?

No. Although HMRC collects enormous sums in tax revenue on behalf of the government, those revenues are paid into the Consolidated Fund. HMRC's operational costs are funded separately through parliamentary supply. Section 43 confirms that parliamentary funding, not collected tax revenues, finances the department's activities.

Why is parliamentary funding of HMRC important for accountability?

Parliamentary funding carries with it parliamentary oversight and scrutiny of how money is spent. This underpins the accountability framework within which HMRC operates. Since funds are voted by Parliament through the normal public expenditure process, Parliament retains the ability to examine and challenge HMRC's use of those resources.

What types of HMRC expenditure are covered by section 43?

Section 43 covers all expenditure in connection with exercising HMRC's functions. This includes staff salaries, office rent and maintenance, IT systems used to process tax returns and collect revenue, and the cost of recruiting additional compliance officers to tackle tax avoidance. All such costs are met from parliamentary funds.

Commissioners for Revenue and Customs Act 2005 section 43

Expenditure

Section 43 provides that the costs incurred by HMRC in carrying out its functions are to be funded by Parliament.

All expenditure by the Commissioners in connection with exercising their functions is paid from money provided by Parliament.
This covers operational running costs such as staff salaries, accommodation, and other administrative expenses.
Parliamentary funding ensures that HMRC does not need to generate its own revenue to cover its operating costs.
This provision establishes the formal legal basis for Parliament to finance HMRC's activities.

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