Select committee: Public Accounts Committee
Conclusion 23
23rd Report - The cost of the tax system
Published 30 Apr 2025
Addressed to HM Treasury
Public Accounts Committee The cost of the tax system All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
HMRC has one of the largest and most complex IT estates in the UK, and it faces a significant challenge to modernise its IT infrastructure to keep pace with changing technology. In 2020 the NAO reported that HMRC recognised 36 Senior grades include all grades from higher executive officers up to and including senior civil servants. Less than 1% of HM Revenue & Customs’ staff were senior civil servants in March 2024. C&AG’s Report, para 2.10 and Figure 7 37 Qq 38, 42 38 C&AG’s Report, para 2.24 39 Comptroller and Auditor General, Managing tax compliance following the pandemic, Session 2022–23, HC 957, National Audit Office, December 2022 40 C&AG’s Report, paras 2.24, 2.29 41 Qq 12, 42; C&AG’s Report, para 2.29 15 the state of its IT systems as a significant risk, due to the postponement of operational maintenance and systems upgrades to secure cost savings.42 The government provided additional funding in Spending Review 2020 to improve the agility, resilience and security of HMRC’s IT. Remediating legacy systems has taken HMRC longer than it had expected and is costing more.43
From: Public Accounts Committee, 23rd Report - The cost of the tax system (HC 645), 30 April 2025
Government response
The government responded to the whole report on 18 September 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it "agrees with the Committee's recommendation" on each of the report's recommendations, and reports that several are already implemented while others carry target dates.
- On simplification, the government will publish HMRC's Transformation Roadmap in summer 2025, which "will include the metrics HMRC will use to report progress".
- On trust, the government agrees with both recommendations and describes them as "Recommendation implemented", citing annual customer surveys, complaints data and focus groups.
- On compliance productivity, it says HMRC "will recruit an additional 5,500 compliance staff by March 2030", alongside other measures to close the tax gap.
- On legacy IT, HMRC "will write to the Committee" on its remediation plans, forecast cost and expected savings, with a target implementation date of September 2025.