Recommendation 24

HMRC has not pursued some controls used in other countries, including ‘transaction–based reporting’ where businesses are required to regularly report all sales and purchases to the tax authority, giving up to date information on the VAT owed.71 We asked HMRC why it had not pursued 63 C&AG’s Report, para 2.15 64 Q 37 65 C&AG’s Report, para 2.5 66 Q 43 67 Q 43 68 C&AG’s Report, para 2.16 69 Oral evidence taken on 19 June 2023, Qq 11–14, Committee of Public Accounts, HMRC Performance in 2022–23, Sixteenth Report of Session 2023–24, HC 76, February 2024 70 Qq 1–3 71 C&AG’s Report, para 2.20 16 this, and it told us that it keeps this under review. HMRC also explained that it could look to build on the record keeping requirements introduced under Making Tax Digital for VAT, and that the government is consulting on e–invoicing in the spring. HMRC acknowledged that transaction–based reporting would give it access to more data to manage compliance risks.72 HMRC told us that it has not undertaken a formal assessment into the costs and benefits of introducing transaction–based reporting in the UK.73 Responding to tax evasion