Paul Gray's resignation letter to HMRC staff:

'I am announcing today that I will be standing down as HMRC chairman as a result of a substantial operational failure in the department. The chancellor will be making a statement to Parliament later today.

This is not the way I would have planned to organise my departure from HMRC. I had hoped to be around for a while longer, and to have had the continuing privilege of leading HMRC towards the vision we have been developing. But I am extremely proud of what all of you in the organisation have achieved during my time as deputy chairman and chairman.

Our record – for example in achieving sustained increases in tax receipts, in steadily improving the operations of the tax credit system, and in playing our full part in protecting the border - is a good one. At the same time, we have made important steps in restructuring the department to face our future challenges, delivering more with reduced resources. I know we still face some major issues where we need to do better. But I am confident the forthcoming Capability Review report will highlight some major strengths in HMRC, while giving us helpful steers on how we can improve further.

I am extremely sorry that you may have learned about this first from the media. I will provide further details after the parliamentary statement.'