Recommendation 18

There is evidence that the pandemic has had a varied economic impact, with some businesses and individuals improving their financial position during the pandemic while others have been negatively affected.42 For example, companies in the hospitality sector have often been negatively impacted.43 However, HMRC has not—and does not plan to— use business sector data in its segmentation of customers.44 It told us that business sector is not as informative as we might imagine and provided us with the example of breweries. As a part of the hospitality sector, we might expect breweries to be very negatively impacted, and indeed, those that supplied pubs and the licensed trade probably were. But breweries that moved quickly into pump supply (supplying pumps to home brewers and similar) may be doing well, thus illustrating why sector is not a reliable indicator of impact.45 Moreover, HMRC explained that businesses within the hospitality sector could 35 Qq 104–107, 110, 113; C&AG’s Report, para 2.15 36 Qq 91, 92, 104–108 37 Qq 98, 109–113 38 Qq 41, 115; C&AG’s Report, para 3.22 39 Q 28 40 Qq 14, 55, 56; C&AG’s Report, para 1.9, 2.10, Figure 12 41 Qq 41, 115; C&AG’s Report, para 2.16 42 C&AG’s Report, para 2.25 43 Qq 42, 54 44 Qq 42, 54, 55; C&AG’s Report, para 2.13 45 Qq 42, 54 HMRC’s management of tax debt 15 still be identified as experiencing a high-impact from the pandemic by its segmentation work, but they would be identified on the basis of their turnover, staff data and use of government support schemes, rather than on the basis of the sector they operate in.46