Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Historically, HMRC has made limited use of external data, but is currently trialling the use...
Conclusion
Historically, HMRC has made limited use of external data, but is currently trialling the use of credit data purchased from the private sector. HMRC told us that when it agrees a debt repayment plan with a customer (which it refers to as a ‘Time to Pay’ plan), it conducts a structured conversation with the customer to identify all of their income and expenditure, including any other debts they are repaying. Alternatively, if the customer has a ‘single financial statement’ (a standard output used across the credit industry, created during a structured interview with a creditor), HMRC will also accept this statement as the basis for agreeing a Time to Pay plan.33 Until HMRC holds the structured conversation with the customer, it has no means of knowing whether that customer has other significant debts.34
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.