Source · National Audit Office

Managing tax compliance following the pandemic

Published: 16 Dec 2022 Recommendations: 6 Type: Value for Money NAO confirmed: 6 Department: HM Revenue and Customs

This report examines the extent to which HMRC is well-placed to manage its compliance work following the pandemic, including future risks and challenges.

Dept: HM Revenue and Customs Topics: Fraud and errorMoney and taxTax and revenue nao.org.uk →

Recommendations

6 items

5 accepted 1 partially accepted 3 implemented 3 in progress

Rec	Recommendation	Addressee	Acceptance	Implementation
1	[HMRC should:] make further improvements to its processes for estimating compliance yield. This should include: ? extending improvements made to quality assurance processes for downstream compliance yield to apply to upstream yield, including assurance work to test underlying evidence; ? reviewing its assumptions in light of the current economic climate, including non-payment rates; and ? updating how it selects and targets the sample of cases to test, so that a robust extrapolation of the errors can be used to calculate to what extent they affect the overall estimate of compliance yield each year. Ref Page 13, Paragraph 22, point a · Implemented Q1 2026-27	HM Revenue and Customs	Accepted	In progress ✓ NAO
2	[HMRC should:] estimate and report the likely extent of official error affecting taxpayers ? by either overcharging or undercharging them ? in carrying out its compliance work. This should include ensuring it has the data needed to make a robust and representative estimate, and to determine whether additional testing is required. Ref Page 13, Paragraph 22, point b · Implemented Q1 2027-28	HM Revenue and Customs	Accepted	In progress ✓ NAO
3	[HMRC should:] supplement its published compliance yield figures with more detailed commentary and analysis of trends between the different components of yield, and what these say about performance. This should indicate levels of uncertainty and could include sensitivity analysis of core assumptions used in the compliance yield estimate. Ref Page 13, Paragraph 22, point c · Implemented Q2 2023-24	HM Revenue and Customs	Accepted	Implemented ✓ NAO
4	[HMRC should:] assess the potential impacts, on taxpayer behaviour and levels of non?compliance, of changes to compliance processes that it introduced or accelerated during the pandemic and has since made permanent, such as fewer face-to-face visits and digital filing of returns. Ref Page 14, Paragraph 22, point d · Implemented Q1 2026-27	HM Revenue and Customs	Partially accepted	In progress ✓ NAO
5	[HMRC should:] analyse the relative rates of return from different types of compliance intervention, and use it to help inform how it prioritises and allocates resources on areas that will be most impactful. This should build on its existing analysis of rates of return. Ref Page 14, Paragraph 22, point e · Implemented Q4 2025-26	HM Revenue and Customs	Accepted	Implemented ✓ NAO
6	[HMRC should:] ensure that there is more consistent evaluation of the effectiveness of all types of its compliance interventions and use the findings to assess value for money. Ref Page 14, Paragraph 22, point f · Implemented Q4 2024-25	HM Revenue and Customs	Accepted	Implemented ✓ NAO

Public Accounts Committee follow-up

1 report

The Public Accounts Committee examined this NAO report and published its own recommendations. The government responds to PAC recommendations via Treasury Minutes.

3 May 2023 Public Accounts C… Forty-Ninth Report - Managing tax compliance following the pandemic — 11 recommendations · parliament.uk