Source · Select Committees · Public Accounts Committee
Recommendation 12
12
Accepted
HMRC does not estimate individuals' total tax administration costs, using outdated measurement rates.
Recommendation
HMRC does not estimate the total costs incurred by individuals in administering tax.18 We therefore asked HMRC why it gave less attention to individuals’ costs than businesses. It said it focused on individuals’ wider customer experience, including the time they take to administer tax and the ease of dealing with tax issues, using metrics such as customer satisfaction.19 We also asked HMRC why the rate it uses to estimate the cost of customer time is three years out of date. HMRC said that following a recommendation in the C&AG’s report, it is “committed to looking at the feasibility of coming up with a measure” for the costs incurred by individuals in administering their tax.20
Government Response Summary
The government agrees to the recommendation and will publish HMRC's Transformation Roadmap by Summer 2025, which will include metrics for progress in reducing customer time spent on tax and will consider measuring administrative burdens on individual taxpayers.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2025 1.2 The government has committed to simplifying the tax system and taking this forward as part of its three strategic priorities for HMRC (improving day-to-day performance and the overall customer experience, closing the tax gap, and reform and modernisation). 1.3 In summer 2025, the government will publish HMRC’s Transformation Roadmap which will bring together HMRC’s strategic and transformation ambitions into a single, public document. The roadmap will set out how HMRC plans to transform and simplify the way it administers tax and customs to reduce the time customers spend managing their affairs through better digital services, simplifying tax rules and improving education and guidance. The Roadmap will include the metrics HMRC will use to report progress. 1.4 HMRC already publishes the cost for HMRC to collect each £1 of tax, within its Annual Report and Accounts, which has been stable at around half a penny since 2017-18. 1.5 HMRC publishes estimates of any significant change in administrative burden on businesses arising from changes in tax policy in Tax Information and Impact Notes. The estimates draw on insights and data from a range of sources, including evidence in HMRC’s Standard Cost Model (SCM), which contains data on the costs of existing obligations. HMRC is assessing the feasibility of updating the SCM to produce a publishable estimate of business taxpayers’ costs and is also considering measurement of administrative burdens on individual taxpayers.