Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Accepted
HMRC unable to quantify the direct impact of additional revenues on the total tax gap.
Recommendation
HMRC was unable to say what impact the additional revenues it expects to bring in would have on the tax gap. It said it is not practical to set a target for the tax gap as it is measured more than a year after the end of the tax year and is then subject to revisions as more data become available. Instead, HMRC said its operational target was an annual target for compliance yield which, if delivered, should in turn reduce the tax gap, once that is also measured. 60 HMRC said this operational target for compliance yield, set at £45.5 billion for 2024–25, is stretching but that it hopes to achieve it.61
Government Response Summary
HMRC will set stretching annual compliance yield targets with Ministers, including expected additional tax revenue from measures announced at Autumn Budget 2024, estimated to generate £6.5 billion in 2029-30.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Target implementation date: June 2025 6.2 HMRC will set stretching annual compliance yield targets with Ministers. This will include the expected additional tax revenue from measures announced at Autumn Budget 2024, which are estimated to generate £6.5 billion in 2029-30 to close the tax gap.