Recommendation 16

HMRC estimated that compliance yield from its tax compliance activities in 2020– 21 was £30.4 billion. Yield was down 18% from the £36.9 billion HMRC generated in 2019–20. HMRC has reported the reduction reflected higher than usual performance in 2019–20 and lower than usual performance in 2020–21. In 2019–20, HMRC’s performance was boosted by a small number of large, one-off successful litigations cases. In 2020–21, HMRC’s compliance activity and yield were affected by pandemic restrictions and HMRC redeploying an average of 6% of its compliance staff to its COVID-19 response. HMRC also took a sympathetic approach to those struggling to pay their tax in 2020–21, only opening an enquiry into those affected by the pandemic if it thought the customer could engage. HMRC opened 29% fewer civil compliance cases in 2020–21 than in 2019–20 (256,000 compared with 361,000) and closed 26% fewer cases (250,000 compared with 338,000).28