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Select Committee · Public Accounts Committee

Managing tax compliance following the pandemic

Status: Closed Opened: 28 Nov 2022 Closed: 21 Jul 2023 6 recommendations 20 conclusions 1 report

The impacts of the COVID-19 pandemic affected both the risks to tax compliance and the ability of HM Revenue and Customs (HMRC) to carry out its compliance work. The need to prioritise direct responses to the pandemic (including new employment and self-employment support schemes) reduced HMRC’s overall capacity for tax compliance work, while lockdowns and …

Clear

Reports

1 report
Title HC No. Published Items Response
Forty-Ninth Report - Managing tax compliance following the … HC 739 3 May 2023 26 Responded

Recommendations & Conclusions

3 items
3 Conclusion Forty-Ninth Report - Managing tax compl… Not Addressed

Set clear targets for compliance yield shortfall and rolling percentage of tax revenues.

Compliance yield fell during the pandemic, and HMRC does not know what level it should be targeting with its current resources. In the five years before the pandemic, HMRC collected on average around 5.2% of tax revenues through its compliance work. This fell significantly during the pandemic, initially to 5.0% …

Government response. The government response provided only states a different PAC conclusion (number 4) and does not contain a response to Recommendation 3 regarding compliance yield targets.
HM Treasury
6 Conclusion Forty-Ninth Report - Managing tax compl… Not Addressed

Specify a contingency plan for increasing compliance capacity to tackle growing non-compliance risks.

There are signs that the tax gap may grow, and that HMRC does not have the operational resilience needed to deal with this. HMRC is funded to stop the tax gap from growing. The tax gap is an important measure of how much revenue may be missed—due to evasion, avoidance …

Government response. The government response provided addresses a recommendation to the Cabinet Office regarding contingency plans for the Shared Services Strategy, which is entirely unrelated to the committee's recommendation concerning HMRC's operational resilience and tax gap capacity.
HM Treasury
1 Conclusion Forty-Ninth Report - Managing tax compl… Not Addressed

Committee examined challenges for HMRC in tackling post-pandemic tax non-compliance.

On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Revenue & Customs (HMRC) regarding the challenges to tackle non-compliance during and following on from the pandemic.1

Government response. The government acknowledges that the Committee took evidence from HM Revenue and Customs based on a report by the National Audit Office.
HM Treasury

Oral evidence sessions

1 session
Date Witnesses
26 Jan 2023 Alison Bexfield · HM Revenue and Customs, Jim Harra CB · HM Revenue and Customs, Penny Ciniewicz · HMRC View ↗

Correspondence

1 letter
DateDirectionTitle
23 Feb 2023 — Joint correspondence from Jim Harra, Chief Executive and First Permanent Secret…