Source · Select Committees · Public Accounts Committee
Recommendation 25
25
The NAO found that HMRC monitors tax receipts for the four environmental taxes it administers...
Conclusion
The NAO found that HMRC monitors tax receipts for the four environmental taxes it administers but it collects little other data to understand changes in behaviour.50 Monitoring Landfill Tax receipts enables HMRC to collect and report data on the volume of waste going to landfill sites, which declined by 65% between 1997 and 2014. But monitoring revenue alone does not enable HMRC to understand how the diverted waste is disposed of and whether that is more or less environmentally harmful than it going to landfill.51
Government Response
Not Addressed
HM Government
Not Addressed
5: PAC conclusion: HMRC has not done enough to evaluate how tax measures with environmental objectives have changed behaviour. 5: PAC recommendation: HMRC should ensure that it has sufficient information to assess whether environmental taxes are achieving their objectives and whether they are having wider impacts, including unwanted behaviour change. 5.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021 5.2 The government agrees it is important that HM Revenue & Customs (HMRC) should ensure it has sufficient information to assess the impacts of environmental taxes, including whether they are achieving their objectives. 5.3 HMRC already uses data and information from various sources to assess whether environmental taxes are achieving their stated environmental objectives and to identify and address unwanted behaviour and risks. For example, this led to the introduction of the Unauthorised Waste Sites measure to tackle non-compliance with Landfill Tax and wider waste sector regulatory requirements. HMRC is also building into the design of Plastic Packaging Tax mechanisms to support effective evaluation of its performance against stated environmental objectives. 5.4 Further activity will need to be considered within HMRC’s overarching approach to evaluation and monitoring. Evaluation can be time consuming and expensive, so the evaluation plans will need to be proportionate, in order to appropriately direct taxpayers' money. And, as the NAO has recognised, it can be extremely difficult to disaggregate the impact of tax measures from other spending and regulatory measures, or other wider factors that drive the behaviour of individuals and businesses. 5.5 Decisions on publication of evaluation and monitoring information are a matter for Ministers.