Recommendations & Conclusions
5 items
1
Conclusion
Thirty-Sixth Report - HMRC performance …
Not Addressed
On the basis of a Report by the Comptroller and Auditor General, we took evidence from HM Revenue & Customs (HMRC) on its performance in 2019–20.1
Government response AI summary
The government states it agrees with the committee's "recommendation" and that it has been implemented, but then refers to a response made to a recommendation from a different committee report regarding eligibility for excluded groups in COVID-19 support schemes, not the introductory conclusion provided.
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HM Treasury
8
Conclusion
Thirty-Sixth Report - HMRC performance …
Not Addressed
HMRC is responsible for administering several government interventions in response to COVID-19. These include: grant-paying measures, such as the Coronavirus Job Retention Scheme and Eat Out to Help Out; measures to defer payments of tax liabilities, such as deferring VAT and self-assessment payments; and other tax measures, such as a …
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HMRC is responsible for administering several government interventions in response to COVID-19. These include: grant-paying measures, such as the Coronavirus Job Retention Scheme and Eat Out to Help Out; measures to defer payments of tax liabilities, such as deferring VAT and self-assessment payments; and other tax measures, such as a VAT cut from 20% to 5% on food, accommodation and attractions. The Office for Budget Responsibility (OBR) has published estimates for the costs of COVID-19 measures. It estimates the costs of measures administered by HMRC, apart from the extra cost of the extension to the CJRS measure, at more than £80 billion.22
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Government response AI summary
The government response reiterates the primary support measures administered by HMRC, which was introductory context in the committee's conclusion, but does not address the observation about OBR's cost estimates.
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HM Treasury
16
Conclusion
Thirty-Sixth Report - HMRC performance …
Not Addressed
We asked the Department to write to us about how its recruitment and location policy would reflect the ‘levelling-up agenda’.43 HMRC subsequently wrote to us to explain that it was supporting the government’s levelling-up agenda by helping ensure the Civil Service was spread more widely across the UK. HMRC told …
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We asked the Department to write to us about how its recruitment and location policy would reflect the ‘levelling-up agenda’.43 HMRC subsequently wrote to us to explain that it was supporting the government’s levelling-up agenda by helping ensure the Civil Service was spread more widely across the UK. HMRC told us that, in future, its staff would be based in a network of large regional centres, specialist sites and transitional sites across every region and nation of the UK and that it would concentrate recruitment in these locations. Eleven of HMRC’s regional centres (Manchester, Birmingham, Leeds, Newcastle, Bristol, Nottingham, Liverpool, Cardiff, Edinburgh, Glasgow and Belfast) are identified as Places for Growth.44 HMRC’s workload
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Government response AI summary
The government response does not address the committee's conclusion regarding HMRC's recruitment and location policy supporting the 'levelling-up agenda', instead providing unrelated information about professional advice for regional centre leases.
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HM Treasury
18
Conclusion
Thirty-Sixth Report - HMRC performance …
Not Addressed
In terms of its compliance work, restrictions on travel and social distancing have affected HMRC’s ability to visit taxpayers and many businesses have not been operating. HMRC told us that while it has restarted some of its criminal investigations, it has put its more routine compliance work that involves visits …
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In terms of its compliance work, restrictions on travel and social distancing have affected HMRC’s ability to visit taxpayers and many businesses have not been operating. HMRC told us that while it has restarted some of its criminal investigations, it has put its more routine compliance work that involves visits to taxpayers’ premises on hold. The Department did point out, however, that the vast majority of its compliance work is done remotely and does not require visiting premises.48 Nevertheless, HMRC confirmed that it will collect less compliance through its compliance activity in 2020–21 than in did in 2019–20.49 We asked HMRC about the impact of the pandemic on tax receipts and the effect of this on its compliance activities. HMRC told us that the economic impact of COVID-19, in reducing incomes, and government measures to defer payment of certain taxes, will lower tax receipts in 2020–21. The Department told us that the Office for Budget Responsibility expects a reduction in receipts in both this year and future years.50 While COVID-19 is an unprecedented event, HMRC told us its experience of the 2007 financial crisis suggests that, in a period of economic downturn, the tax gap is not necessarily affected significantly, with the exception of one element. That one element being ‘non- payment’ mainly where people or businesses become insolvent without paying their taxes.51
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Government response AI summary
The government's response outlines overall funding allocations for HMRC from the 2020 Spending Review, including for customs, Making Tax Digital, and IT. It states that HMRC is reviewing its 2021-22 priorities and preparing its Outcome Delivery Plan, but does not specifically address the committee's observations …
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HM Treasury
19
Conclusion
Thirty-Sixth Report - HMRC performance …
Not Addressed
HMRC told us that it has a significant debt balance, about £27 billion, which is not in any payment arrangement and has increased mainly as a result of policy decisions to allow taxpayers to defer their tax payments. HMRC aims to get as much of the balance as it can …
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HMRC told us that it has a significant debt balance, about £27 billion, which is not in any payment arrangement and has increased mainly as a result of policy decisions to allow taxpayers to defer their tax payments. HMRC aims to get as much of the balance as it can into “managed payment arrangements” and to minimise its exposure to losses through insolvencies. HMRC said its intention was to allow taxpayers as much time as they need to pay their tax, and to try to avoid bankruptcy or insolvency except “as a very last resort on non-viable taxpayers”. HMRC highlighted the very high compliance rates, about 90%, of its ‘time-to-pay’ instalment arrangements to recover tax debts, which allow it to collect the vast bulk of outstanding taxes and to minimise the number of insolvencies.52 In the early stages of the COVID-19 lockdown, HMRC had suspended all of its debt recovery actions to recognise the struggles faced by taxpayers as a result of the pandemic. The Department told us that more recently it has restarted it debt recovery operations, targeting businesses that its data suggest ought to be able to pay their tax liabilities.53
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Government response AI summary
The government response does not address the committee's conclusion regarding HMRC's significant debt balance or its approach to debt recovery, instead detailing unrelated funding allocations for customs, IT, and tax digitalisation.
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HM Treasury