Source · Select Committees · Public Accounts Committee
Recommendation 8
8
HMRC used the data in its Self Assessment system to calculate how much self- employed...
Conclusion
HMRC used the data in its Self Assessment system to calculate how much self- employed people would receive as part of the SEISS grant award. However, this was developed in the 1990s and lags behind other countries’ systems. HMRC told us that with better quality data it may have been able to help more people and tailor the level of the grant award more to meet people’s individual circumstances. It accepted that it needed to get better quality data and that it was “definitely moving slower than the best countries around the world in resolving that”.15 HMRC conceded that poor data quality meant it had to do a fair bit of data cleansing before launching the scheme to ensure that the data was accurate. It suggested that if this hadn’t been required, it may have been able to open the scheme a couple of weeks earlier.16 The NAO found that technical issues with the Self-Assessment system also meant that HMRC had to manually enter the trading profits of around 800 self-employed people to prevent them from being excluded.17 HMRC has a programme in place, Making Tax Digital, designed to upgrade its systems and permit users to provide information more frequently using digital services. This should provide HMRC with better quality data going forward. This should have been in place by 2019, but apart from a small pilot project, is not now expected until 2023.18
Government Response
Not Addressed
HM Government
Not Addressed
2.1 The government agrees with the Committee’s recommendation. Target implementation date: March 2021 2.2 HMRC recognises the value in learning from other countries’ experiences, and in ensuring that these insights are deployed in the design and implementation of Making Tax Digital (MTD) and the wider tax system. The department considered these insights in designing and implementing MTD. This includes the pre-population of tax returns, prompts and nudges in software, and benchmarking. 2.3 HMRC continues to work closely with the Organisation for Economic Co-operation and Development (OECD) to enhance its understanding of the international landscape. COVID-19 reinforced the need for more flexible, resilient and responsive tax administration system. The HMRC and HMT 10-year Tax Administration Strategy sets out the departments’ commitments to build a trusted, modern tax administration system that works closer to real time and is better able to respond to national crises. As part of this, the departments have set out a future roadmap for MTD which provides those within scope with time to make the necessary preparations. 2.4 The 10-year strategy includes extending MTD and increasing use of real-time information to give customers and HMRC a more up-to-date understanding of and certainty over a customer’s position. 2.5 As set out in the Tax Administration Strategy, the government intends to publish a call for evidence on real time reporting and payments of tax that will provide a signpost for future changes in this area.