HMRC brought in an extra £29bn by cracking down on the minority of individuals and businesses who try to not pay the tax they owe.
The figure is revealed in its annual reports and accounts for 2016/2017 published on 13 July, which also showed improved customer service.
Last year was HMRCs seventh consecutive year of record total tax revenues, collecting a total of £574.9bn, £38.1bn more than the previous year.
Jon Thompson, chief executive and permanent secretary at HMRC, said:In the last year, we have generated £28.9bn of compliance yield, billions of pounds that would have otherwise been lost to the UK through avoidance, evasion and organised crime but will now be spent on public services.
“Thats around £1,000 for every household in the UK.
“We have also strengthened our grip on the minority who deliberately try to cheat the system and continue to pursue those who refuse to pay what they owe, on behalf of the honest majority.
“The message is clear to those who try to not pay their fair and legal share: there is nowhere left to hide.
Edward Troup, executive chair and permanent secretary at HMRC, said the tax watchdog’s ability to collect the money required to fund the UKs public services is the “ultimate yardstick by which we will be measured”.
But he added the public also rightly judge the taxman on the quality of service it provides to the majority of people in the UK who are honest and pay the right amount of tax on time.
“Our continued focus on giving our customers the service level they deserve is paying dividends,” he said.
“There are now quick and simple online tools to allow people to deal with their taxes or tax credits anywhere, anytime and the best phone service in years for those wanting to call us.
HMRC claimedÂ that for customers still wishing to contact HMRC on the phone, they can now do so seven days a week, getting through in just four minutes on average.
The report also showed HMRC has over the last six years brought more than 500 serious organised criminals to justice. Investigations and enforcement action against organised crime generated or protected £3.2bn in compliance yield in 2016/17.
It handled more than 1,200 cases heard in courts and tribunals winning 83 per cent and protecting £15bn in tax revenues.
HMRC also helped more than nine million individuals to access online services with more than five million businesses having access to their online account to file, pay and obtain help.
Alan Lakey, director, Highclere Financial Services said his clients had noticed a marked improvement in service.
My clients and my accountants’ experiences of HMRC support this. They have speeded up services and made life easier.
“If only other government departments could operate in a similar fashion!