Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Gaps and lags in HMRC’s data contributed to the schemes providing excessive support to some,...
Recommendation
Gaps and lags in HMRC’s data contributed to the schemes providing excessive support to some, while others in need were ineligible. We have previously reported that data limitations contributed to some people being excluded from the schemes, including the newly self-employed and employed, and limited company directors who took their income as dividends. Data weaknesses also contributed to the first three of the five SEISS grants providing £3.5 billion to people whose self-employed incomes had increased during 2020–21. By October 2020, the Departments had also made CJRS payments of around £6.5 billion to employers whose turnover stayed the same or increased during the pandemic, with £1.5 billion of this going to employers who reported that they would not have made redundancies or closed permanently even without the scheme. Making Tax Digital is intended to provide more frequent and timely data on the income and expenses of self-employed people, but HMRC cannot say when this will be delivered. HMRC has also conducted a public consultation about collecting additional data, such as dividends paid to limited company directors, which could help it target support. HMRC acknowledges, however, that this could impose added burdens on customers. 6 COVID employment support schemes Recommendation 2: The Departments should set out, by July 2023, their priorities for obtaining data which would enable the better targeting of economic support. In doing so, they should consider how they can keep burdens on customers proportionate.
Government Response Summary
The government agrees with the committee's recommendation and has consulted on options for improving the range of data HMRC collects, uses and shares, including collecting data on employee hours worked, dividends received, and start and end dates of self-employment, with implementation planned from April 2024.
Government Response
Accepted
HM Government
Accepted
2: PAC conclusion: Gaps and lags in HMRC’s data contributed to the schemes providing excessive support to some, while others in need were ineligible. 2: PAC recommendation: The Departments should set out, by July 2023, their priorities for obtaining data which would enable the better targeting of economic support. In doing so, they should consider how they can keep burdens on customers proportionate. 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 From July to October 2022, the government consulted on options for improving the range of data HMRC collects, uses and responsibly shares across government, to provide an accurate and up to date picture of citizens and businesses. Some options were focused on specific customer groups, such as the self-employed, whilst others proposed collecting a particular piece of information across different customer groups (e.g., occupation). 2.3 Following careful consideration of the views of respondents to the consultation, the government published a response on 27 April 2023. This set out a measured and proportionate approach to prioritising the collection of data that customers already hold, 17 including specific options that will be taken forward in a future Finance Bill with the intention to collect this data from April 2024. 2.4 The government will prioritise three options: collection of data on employee hours worked via Real Time Information PAYE reporting, dividends received from owner-managed businesses via the Self-Assessment return and start and end dates of self-employment, as set out in the consultation. The government also previously set out plans for the introduction of Making Tax Digital for Income Tax, which will provide a more up-to-date data picture of the income and expenditure levels of self-employed customers with a qualifying income of more than £50,000 per annum from 2026 and £30,000 from 2027, through quarterly updates. 2.5 The government will continue to review the data it collects to ensure future policy measures requiring economic support are effectively targeted whilst also balancing the cost of collection.