Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Acknowledged
HMRC does not collect the data from providers needed to plan timely action to improve...
Conclusion
HMRC does not collect the data from providers needed to plan timely action to improve young people’s engagement with their accounts and assess whether its actions are working. HMRC’s understanding of Child Trust Fund accounts that have matured but are yet to be claimed is nearly two years out-of-date: its most recent estimate is based on data collected in April 2021, just seven months after the first accounts matured. It intends to publish its next set of statistics in summer 2023 based on data from April 2022. It told us it cut back its monitoring and compliance activity on the scheme from 2013, when the risk of tax loss from people opening Child Trust Funds they were not entitled to had fallen significantly. Consequently, since then HMRC has not been actively protecting Child Trust Fund customers (although the standard protections provided by the FCA still apply) or monitoring providers’ behaviour. HMRC has also not kept its records on Child Trust Funds up to date, affecting the effectiveness of its tracing tool. Recommendation 5: HMRC should: a) improve the timeliness of its data collection and statistical releases, to present a more accurate and up-to-date assessment of the scheme. b) use this improved understanding of the status of Child Trust Funds to target activity to improve young people’s awareness and management of their accounts.
Government Response Summary
The government agreed, stating the recommendation is implemented. HMRC has reviewed its awareness and tracing strategy, is confident in its current approach, and will continue to explore new routes and monitor unclaimed accounts to determine when further intervention is appropriate.
Government Response
Acknowledged
HM Government
Acknowledged
The government agrees with the Committee’s recommendation. Recommendation implemented HMRC has reviewed its established strategy for raising awareness of, and ability to trace, CTFs and is confident that what HMRC is, and has been, doing to raise awareness among young adults is sufficient and proportionate. HMRC continues to explore new routes to reunite young people with their CTF and will use these if it deems necessary. HMRC’s current strategy will reunite the majority of accounts with their owners, but HMRC recognises there will be a small number of cases where further action may be required. HMRC will monitor how many accounts remain open and judge when it is appropriate to intervene. The vast majority of people will know where their account is, but HMRC will consider whether individuals should be contacted directly once it becomes clear they have lost contact.