HMRC have made significant cost savings over 2012 contributing to savings of £296 million as the department seeks to reduce running costs by 25 percent in 2014.

Significant savings have been made from ICT service contracts including outsourcing services to Aspire with a contract renegotiation saving £200 million by lowering the cost of IT services.

Amyas Morse, the head of the National Audit Office, said: "In one year, HMRC has managed to deliver a third of the savings it is required to deliver over the four years of the spending period, at the same time as maintaining performance in key areas such as maintaining tax collection and reducing tax debt".