Recommendation 4

HMRC is far behind where it needs to be in making good use of data to manage debt effectively. Over a decade ago, in 2009, HMRC told our predecessor committee that it planned to take an incremental approach to gradually link debts in different IT systems. This would create a single customer record, which we agreed was needed. Yet, 13 years later, HMRC still records details for different taxes on different IT systems and has no straightforward way to combine them. Current cross-government work to bring together all debts individual customers owe to government departments will not bear fruit within the next three years. When HMRC agrees a debt repayment plan with a customer, it seeks to consider their overall position, including expenditure and non-tax debts. But it currently has no means of knowing this until it speaks to them, while the private sector agencies with whom HMRC works, do access private sector data that can identify other customer debts. HMRC is running a pilot to determine whether purchasing private sector data would be cost effective. It is also exploring how to identify what methods of contact are most effective to tailor contact to individual taxpayers. HMRC’s management of tax debt 7 Recommendation: HMRC should write to the Committee within six months, to provide an update on: • How much it has spent on the single customer record so far, how much it expects to spend to complete this work, and when it expects to complete this work. • The scope of its work with the rest of government to share data and take a more customer orientated approach, and the timeframe over which it expects to complete this work. • The results of its pilot test using private sector data and plans for further use.