Source · Select Committees · Public Accounts Committee
Recommendation 17
17
HMRC told us that it does not wish to drive any viable business to the...
Conclusion
HMRC told us that it does not wish to drive any viable business to the wall by pushing them to repay debt too quickly.39 Therefore, during the pandemic, it began using data it already holds on customers to inform how urgently it pursues them. Specifically, it uses data on business customers’ revenue, staffing and use of the employment support schemes, to identify how severely they have been affected by the pandemic. It categorises (or ‘segments’) each customer as experiencing a low-, medium- or high-impact from the pandemic and then uses this categorisation to inform how vigorously it pursues the customer—the frequency and tone of reminder letters it sends to them and the speed with which it escalates through its debt recovery actions (sending various letters, then telephoning the customer, before passing the case over to field collections and eventually enforcement).40 HMRC also told us that it is exploring how it can develop this approach, by looking at taxpayers’ propensity to pay, alongside their ability to pay.41
Government Response
Not Addressed
HM Government
Not Addressed
5: PAC conclusion: HMRC is not using all relevant data sources to understand how the pandemic is affecting taxpayer’s ability to repay. 5: PAC recommendation: HMRC should identify and obtain the data sources which are most relevant to understand the ongoing impact of the pandemic on businesses. As a minimum we would expect HMRC to make use of sectoral data. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2022 5.2 HMRC recognises the importance of using relevant data about businesses to understand their ability to pay their debts and that this is important beyond the impact of the pandemic. HMRC already has access to a lot of data about businesses through their various tax returns. HMRC used changes in turnover, visible from VAT returns, and changes in the number of employees and overall pay bill, visible from PAYE returns, when assessing how businesses had been impacted by the pandemic. 5.3 HMRC will combine its response with recommendation 4 and set out what data it is using, or planning to use, to assess ability to pay and why. Acquiring, analysing and using data has financial and opportunity costs, so it is important to consider the value for money of each data source. 5.4 HMRC will re-assess the extent to which sectoral data adds value to its segmentation approach. However, previous analysis has shown that it is less effective than business- specific data as impacts within sectors can vary widely.