Where the Inland Revenue fits in

Overall responsibility for the economic health of the UK lies with the Chancellor of the Exchequer and various government departments, including:

• 1. The Treasury

Responsible for developing the government's economic and financial policy. The Treasury Ministers make critical decisions about policies and practices affecting the Inland Revenue and HM Customs and Excise. These decisions include agreeing how best to balance tax revenues against planned government expenditure. All government departments spend money and need to obtain Treasury approval for any proposed major expenditure.

• 2. The Inland Revenue

Responsible for administering direct taxes, student loans, paying tax credits and enforcing the national minimum wage. The Inland Revenue exists to ensure that everyone understands and claims what they are entitled to and understands and pays what they owe, so that everyone contributes to the UK's needs. It has strong regulatory powers including the power to impose financial penalties and to take people or companies to court.

Its main activities are set out below:

• 3. HM Customs and Excise.

Collects a range of indirect taxes and duties including VAT, taxes on alcohol and tobacco, and import duties. It also seeks to prevent undesirable items such as drugs and weapons entering the UK.