Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Accepted
HMRC has not actively protected Child Trust Fund customers or monitored provider behaviour.
Conclusion
HMRC judged that, by 2013, the risk of tax loss from people opening Child Trust Funds they were not entitled to had fallen significantly. Few Child Trust Funds were opened after this point. We questioned whether HMRC had also assessed the risk of Child Trust Funds being mismanaged, such that young people might be losing money. HMRC told us that it has not been actively protecting Child Trust Fund customers or monitoring providers’ behaviour, although the standard protections provided by the Financial Conduct Authority still apply.32
Government Response Summary
The government agrees and aims to implement by Summer 2024, committing HMRC to exploring publishing more timely Child Trust Fund information, reminding providers of return requirements, and improving analytical processes, which would implicitly aid in assessing mismanagement risks.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target Implementation date: Summer 2024 5.2 HMRC is exploring opportunities for publishing more timely information on CTFs. HMRC has reminded providers of the requirement to make returns within 60 days of the end of the tax year. HMRC is also improving its analytical processes to reduce lead times. HMRC anticipates that future statistical information up to tax year 2023 to 2024 will be published by tax year in the Summer of 2024. 5.3 Since the Committee hearing, HMRC has published more recent information on CTFs up to April 2022 in June 2023, including new tables showing the cumulative number of matured accounts. Prior to the publication, HMRC was aware that some Child Trust Fund providers had not completed the requisite annual return. HMRC identified and reminded providers of the outstanding returns and these are included in the latest published statistics. The issue of missing returns was addressed in paragraph 3.3 of the Annual savings statistics: background quality report on Gov.UK.