Source · Select Committees · Public Accounts Committee
Recommendation 19
19
Accepted
Understanding compliance yield performance is essential for HMRC's resource allocation and effectiveness.
Conclusion
HMRC’s compliance yield estimate is an important measure of the impact of its compliance work. A good understanding of this performance is essential for identifying whether HMRC has the overall resources it needs, as well as whether it is deploying these resources to where they are most effective.32
Government Response Summary
The government agrees with the importance of accurate yield measurement and will design a new sampling approach by June 2024 to allow for extrapolation of errors from TSAP reviews to the annual estimate of compliance yield. This will include considering options like aligning sampling to value profiles and developing a mechanism to estimate the impact of official error on taxpayers.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: June 2024 5.2 HMRC has robust processes in place to record yield. HMRC conducts an annual review which evaluates the quality of its compliance casework – the Tax Settlement Assurance Programme (TSAP) and which also provides assurance over yield recording. Where this identifies measurement issues on cases tested these are corrected. HMRC considers whether or not these errors might have a wider impact on the yield total, and adjust if needed. While HMRC considers the current approach provides an appropriate view of the impact of its compliance work, HMRC accepts it could do more to enhance our sample selection to further improve our measurement assurance. HMRC will design a sampling approach that allows for extrapolation of errors from cases reviewed as part of the TSAP to the annual estimate of compliance yield. HMRC will consider how best to do this, taking a proportionate approach, which will involve considering the merits of different options such as the following: • moving TSAP annual reporting to financial year reporting; • better aligning TSAP sampling to reflect the value profile of compliance yield; and/or • continue with the current approach to sample selection, and where a large compliance yield error is found, test further cases in that stratum to determine the extent of likely error. 5.3 TSAP is an annual review programme and it will take at least a transition year to fully incorporate any changes. Once an appropriate sampling framework has been established HMRC will develop a mechanism for estimating the impact of official error on taxpayers.