Recommendations & Conclusions
9 items
3
Conclusion
Thirty-Third Report - HMRC performance …
Accepted
HMRC’s plan to only recover a quarter of losses due to fraud and error on its COVID-support schemes does not go far enough. HMRC estimates that total error and fraud across the lifetime of the COVID-support schemes is £4.5 billion, representing 4.6% of the £96.9 billion total support provided. This …
Government response. HMRC maintains performance indicators for compliance performance and will continue to address COVID-19 compliance risks, transitioning the Taxpayer Protection Taskforce into 'business as usual' compliance activity from April 2023. This will allow HMRC to consider the risk of overclaims of …
HM Treasury
4
Recommendation
Thirty-Third Report - HMRC performance …
Accepted
We are concerned that HMRC may be lagging behind other established tax authorities in preventing fraudulent VAT registrations. HMRC is constantly changing its processes to prevent criminals from exploiting the tax system. VAT is particularly susceptible to fraud and criminality as it can involve HMRC repaying large amounts to taxpayers. …
Government response. HMRC will engage further with international partners, including German tax authorities via its FCLO in Berlin, to understand how other tax authorities tackle VAT fraud through controls on registration, with target implementation by end March 2024.
HM Treasury
5
Recommendation
Thirty-Third Report - HMRC performance …
Accepted
Taxpayers and their agents are still not receiving an acceptable level of customer service. In the last five years, HMRC has reduced its customer service staff numbers from 25,500 to 19,500. During the pandemic, HMRC’s performance in replying to post or handling calls fell significantly, partly because it did not …
Government response. HMRC will write to the Committee in April 2023 setting out its plan to improve customer service. The metrics used to monitor customer service performance will be published externally in HMRC’s 2023-24 Outcome Delivery Plan, and quarterly/monthly performance updates against …
HM Treasury
6
Recommendation
Thirty-Third Report - HMRC performance …
Accepted
HMRC has further to go until it can differentiate between taxpayers who are genuinely struggling, and those who can afford to meet their liabilities but are choosing not to. Total tax debt in August 2022 was £46 billion, less than at the height of the pandemic in March 2021, but …
Government response. HMRC will invest £47.2 million to improve its capability to manage tax debts and better distinguish between taxpayers who can afford to settle their tax debts and those who need support, and will apply external data to its internal modelling …
HM Treasury
8
Recommendation
Thirty-Third Report - HMRC performance …
Accepted
HMRC’s 2020–21 estimates of the tax gap are more uncertain than usual due to the impact of COVID-19 on the data it uses to inform its estimates. For example, HMRC said it has had to make some assumptions about the underlying level of write-offs and remissions that might happen. HMRC …
Government response. HMRC will explore the feasibility of applying advanced statistical techniques to produce an overall uncertainty range for the headline tax gap figure by December 2023, and will publish a range if analytically robust.
HM Treasury
15
Recommendation
Thirty-Third Report - HMRC performance …
Accepted
HMRC’s post and call handling performance fell significantly during the pandemic. For example, in 2021–22 HMRC responded to 39.5% of post within 15 days, compared to 70.3% in 2019–20. The average speed of answering calls to HMRC helplines was 12:22 minutes in 2021–22, compared to 6:39 minutes in 2019–20.19 The …
Government response. HMRC will write to the Committee in April 2023 setting out its plan to improve customer service including metrics to monitor performance, the level of service taxpayers and agents can expect over the next three years, how it will support …
HM Treasury
17
Recommendation
Thirty-Third Report - HMRC performance …
Accepted
HMRC’s expects to improve customer service by continuing digitalise the tax system, for instance by developing its digital assistant and single customer account. In this way HMRC hopes to reduce the demand for phone and post by servicing more people through online systems. HMRC’s customers report being more satisfied with …
Government response. HMRC will transform digital services for individuals through incremental releases over the next two years, prioritizing delivery with the largest customer benefit and efficiency impacts; already released features include online proof of entitlement to Child Benefit, and future features will …
HM Treasury
19
Conclusion
Thirty-Third Report - HMRC performance …
Accepted
HMRC said it is dealing with a larger number of smaller debts than it is has dealt with before. It told us that it had previously took a one-size-fits-all approach to managing debts, but is now trying to vary its approach depending on whether a debtor is in genuine financial …
Government response. HMRC recognizes the importance of differentiating between taxpayers who are struggling to pay and those who choose not to do so, and states its priority is to support those in short term financial difficulty. It is enhancing the online Self-Serve …
HM Treasury
23
Conclusion
Thirty-Third Report - HMRC performance …
Accepted
Fraud and error is particularly high on the scheme for small and medium-sized enterprises, estimated at 7.3% in 2021–22. HMRC said it gets about 76,000 claims on this scheme every year, providing a lot of activity for HMRC to police.40 It said it is introducing new measures from April 2023 …
Government response. HMRC will continue to address and recover overclaimed grants as part of its business-as-usual compliance activity, taking action against those who have abused the COVID-19 financial support schemes where it is cost effective to do so.
HM Treasury