Select Committee · Public Accounts Committee

HMRC Annual Report and Accounts 21-22

Status: Closed Opened: 26 Jul 2022 Closed: 13 Apr 2023 9 recommendations 14 conclusions 1 report

Gareth Davies, the Comptroller and Auditor General (C&AG) of the National Audit Office, has ‘qualified’ his audit opinion on HMRC’s 2020-21 Annual Resource Accounts because of “material levels of error and fraud in the COVID-19 support schemes, Personal Tax Credits expenditure and Corporation Tax research and development reliefs” . The Committee will question Permanent Secretary …

Reports

1 report

Title	HC No.	Published	Items	Response
Thirty-Third Report - HMRC performance in 2021–22	HC 686	11 Jan 2023	23	Responded

Recommendations & Conclusions

4 items

2 Recommendation Thirty-Third Report - HMRC performance … Rejected

Resourcing HMRC’s compliance work to maintain rather than reduce the tax gap means the government...

Resourcing HMRC’s compliance work to maintain rather than reduce the tax gap means the government is missing out on billions in lost revenue. HMRC estimates that the tax gap—the difference between the amount of tax that should, in theory be paid to HMRC, and what was actually paid—was £32 billion …

Government response. The government disagrees with the recommendation to set out the level of investment needed to reduce the tax gap and to report an uncertainty range for the tax gap estimate, stating that funding levels are a decision for Treasury ministers …

HM Treasury

9 Conclusion Thirty-Third Report - HMRC performance … Rejected

With the resources it was given in the 2021 Spending Review, HMRC’s aim is to...

With the resources it was given in the 2021 Spending Review, HMRC’s aim is to maintain the tax gap and prevent it from growing. For every £1 that it spends on compliance activity, it said it recovers £18 in additional tax revenues. HMRC sometimes gets additional resources from HM Treasury …

Government response. The government disagrees, stating that HMRC's funding levels are a decision for Treasury ministers based on advice from HMRC and HM Treasury officials, and it is right that this advice is considered in private.

HM Treasury

21 Recommendation Thirty-Third Report - HMRC performance … Rejected

The government has a target of 2.4% of GDP to be spent on research and...

The government has a target of 2.4% of GDP to be spent on research and development.32 To encourage this investment, HMRC administers tax reliefs to companies via two schemes – one for large companies and one for small and medium-sized enterprises. HMRC said that the scale of the schemes is …

Government response. The government disagrees with the recommendation, stating that HMRC has already published reports on the additional R&D expenditure stimulated by tax relief schemes and that further analysis will be carried out in the future but not within 12 months, although …

HM Treasury

22 Conclusion Thirty-Third Report - HMRC performance … Rejected

In 2021–22, HMRC granted research and development tax reliefs worth £9.5 billion.34 HMRC said the...

In 2021–22, HMRC granted research and development tax reliefs worth £9.5 billion.34 HMRC said the relief is an attractive target for abuse, whether by companies that have not carried out any research and development or by advisors encouraging companies to push the boundaries of what expenditure is eligible to be …

HM Treasury

Oral evidence sessions

1 session

Date	Witnesses
20 Oct 2022	Angela MacDonald · HMRC, Jane Whittaker · HM Revenue and Customs, Jim Harra · HMRC, Justin Holliday · HMRC	View ↗

Correspondence

3 letters

Date	Direction	Title
6 Dec 2022	—	Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, r…
15 Nov 2022	—	Correspondence from Rt Hon Jeremy Hunt MP, Chancellor of the Exchequer, HM Trea…
8 Sep 2022	—	Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, r…

Accepted	9
Acknowledged	4
Not Addressed	1
Rejected	4