Source · Select Committees · Public Accounts Committee
Recommendation 12
12
In 2008, the NAO recommended that HMRC develop its IT systems to effectively provide it...
Conclusion
In 2008, the NAO recommended that HMRC develop its IT systems to effectively provide it with a single customer record or view, either through one new system or by making progressive changes that allowed it to link debts from different taxes.28 In 2009, following this recommendation, HMRC told our predecessor committee that it could not afford the estimated £250 million to develop an IT system which automatically linked the different tax records of each taxpayer alongside its existing commitments. It was therefore planning to link VAT debts to its main debt management system, as the first step in an incremental approach.29 Thirteen years later, HMRC still records details for different taxes on different IT systems and has no straightforward way to combine or link them.30 It has identified some benefits it might realise if it could achieve a single customer view, such as ‘setting off’ credits against debts. HMRC also told us it had made advances towards a single customer record or account in recent years, citing the personal tax account and business tax account as examples of progress. HMRC has been awarded funding to make further progress over the next three years. It believed it would be able to link data for the major tax streams within three years but it would still not be able to link or view data across all types of tax at the end of this three-year period.31
Government Response
Not Addressed
HM Government
Not Addressed
4: PAC conclusion: HMRC is far behind where it needs to be in making good use of data to manage debt effectively. 4: PAC 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. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2022 4.2 A single digital account for all taxpayers that is easily accessible and secure is a key component of a tax system fit for the 21st century. A unique customer record is needed to underpin the digital account and improve HMRC’s understanding of the whole of a customer’s tax affairs. Spending Review 2021 provided funding of £81.7 million for the Single Customer Account and £53.9 million for the Unique Customer Record. HMRC will write to the Committee with further information on costs and target completion dates. 4.3 HMRC will explore opportunities to share data across government to improve its understanding of taxpayers' finances. In particular, HMRC is working with the Government Data Exchange programme led by the Cabinet Office, which aims to easily, securely and responsibly share data across government. HMRC will provide more detail in its response to the Committee later this year. 4.4 HMRC is trialling the use of credit reference agency data to test whether the additional insight improves overall understanding of an individual’s ability to pay their tax liabilities. The analysis of the trial will not be completed until Autumn 2022, so HMRC will respond to this recommendation in December 2022.