Source · Select Committees · Public Accounts Committee
23rd Report - The cost of the tax system
Public Accounts Committee
HC 645
Published 30 April 2025
Conclusions (6)
9
Conclusion
We asked HMRC about the cost implications of running the Scottish Income Tax system. HMRC said the way it administers Scottish Income Tax is same as for UK Income Tax. The Scottish Government pays for the “bit more money” HMRC spends on IT and accounting needed, for example, to make …
17
Conclusion
We asked HMRC why it provided additional support to large business. HMRC told us customer compliance managers were there to manage the risks large business pose to tax revenue and not to give them a better 25 HMRC has reported the change for small businesses was not statistically significant, year …
19
Conclusion
Not Addressed
HMRC explained that its strategy is to promote good compliance and prevent non–compliance (collectively known as ‘upstream’ compliance), and this is “bearing fruit,” with upstream yield increasing to about a third of all yield in 2023–24. HMRC considers that upstream compliance is less costly than ‘downstream’ work (carried out in …
Government Response Summary
The government claims the recommendation is implemented but does not address the committee's observation that HMRC lacks sufficient analysis of costs and marginal returns between upstream and downstream compliance work, instead providing updates on compliance yield and staff recruitment.
31
Conclusion
We asked HMRC whether there were potential security concerns that could be posed by the third–party MTD software taxpayers use to submit their tax returns, including whether there were risks to HMRC’s own systems.63 In written evidence provided after our evidence session, HMRC told us it takes security very seriously. …
38
Conclusion
The written evidence received from Dr Edidiong Offiong Bassey also suggests that HMRC is not making the best use of technology. In particular, he indicated there has been limited promotion in the UK of electronic invoicing and electronic fiscal devices which have seen 71 CTS0001 72 Q 48 73 Q …
39
Conclusion
Not Addressed
We asked HMRC about its joint consultation with the Department for Business & Trade on e–invoicing which it launched in February 2025. HMRC said e–invoicing has the potential to help businesses and build tax compliance into the way they run their business. We asked what was being covered in the …
Government Response Summary
The government's response focuses entirely on HMRC's use of AI and its initiatives in this area, without addressing the committee's observation or implicit query about e-invoicing.