HM Revenue & Customs (HMRC) has allocated more than £1.5bn for 2024-25 to cover wages for compliance staff, marking a 23 per cent increase on its 2021-22 pay bill. The figures, disclosed in a freedom of information request obtained by think tank Parliament Street, highlight the tax authority’s growing commitment to tackling fraud, non-compliance and tax evasion.

The Customer Compliance Group (CCG), HMRC’s largest compliance department, currently employs 28,074 people. While this is slightly down from 28,699 in 2021-22, it represents a rise on the 27,374 recorded last year. Despite a modest reduction in overall headcount, the wage bill for 2023-24 rose to £1.3bn, £300m higher than two years earlier.

Fraud investigations under scrutiny

Within the CCG, HMRC’s Fraud and Investigation Service (FIS) employs 4,859 staff with a pay bill of £301m. This represents a 24 per cent increase on the £243m allocated four years ago, despite staff numbers remaining largely unchanged. The FIS plays a central role in counter-fraud operations, with HMRC reporting that it secured £48bn in tax revenue over the last fiscal year that would otherwise have been lost.

Government strategy on compliance

The Labour government is reinforcing HMRC’s compliance efforts with significant investment in both staffing and technology. In addition to recruiting 5,000 new compliance officers announced at the Autumn Budget, the Spring Budget confirmed a further 500 hires. Ministers expect these measures to generate an additional £7.5bn annually for public services by 2029-30.

Industry experts have welcomed the funding but caution that investment must go beyond wages. Sheila Flavell, COO of FDM Group, noted that effective compliance depends as much on training and development as on headcount. Markus Hornburg of Basware added that compliance is a matter of trust as well as enforcement, highlighting risks ranging from financial penalties to reputational harm.

Recent challenges

HMRC has also faced criticism from the Treasury Select Committee for failing to report a £47m phishing incident promptly. While the authority stressed this was not a cyberattack, the episode has intensified scrutiny of its resilience against fraud.

‍