UK Inquiry Tracker

The cost of the tax system

Public Accounts Committee Closed Inquiry

Opened: 15 Jan 2025 Closed: 17 Jul 2025 Parliament page

HM Revenue and Customs’ (HMRC) stated aim is to run the tax system in the simplest, most customer-focused and efficient way. In 2020, the Government published its 10-year strategy to build a trusted, modern tax administration system. The long-term goal is to create a system which prevents non-compliance, and allows … Read more HM Revenue and Customs’ (HMRC) stated aim is to run the tax system in the simplest, most customer-focused and efficient way. In 2020, the Government published its 10-year strategy to build a trusted, modern tax administration system. The long-term goal is to create a system which prevents non-compliance, and allows both businesses and individuals to get their tax right the first time. The PAC has recently scrutinised HMRC’s customer service , underpinned by National Audit Office (NAO) findings in 2024 that delivering responsive customer service continued to be one of HMRC’s biggest challenges. The Committee has also examined tax evasion in the retail sector , challenging HMRC on evident gaps in controls. Overall evasion costs represent an annual £5.5bn hit in lost revenue to the public purse every year. The NAO undertook a 2025 report on drivers of cost in the tax system, which costs HMRC billions of pounds a year to administer while placing administrative and financial burdens on taxpayers, in addition to the taxes they owe. The study sought to help understand how elements of the tax system drive these costs, while establishing what progress HMRC has made in reducing costs and improving efficiency. Based on the NAO report, the PAC will hear from senior HMRC officials on topics including: What costs the UK tax system imposes on HMRC taxpayers and their intermediaries; Challenges in tackling the costliest parts of the system; and How HMRC is using opportunities to reduce costs. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. Please note that the Committee is unable to consider or assist with individual cases. If you need help with an individual problem you are having, you may wish to read the information on Parliament’s website about who you can contact with different issues . The deadline for submitting written evidence is Wednesday February 19 at 23:59pm. Show less

4 Recommendations

35 Conclusions

1 Report

1 Oral session

3 Letters

1 Event

Activity timeline 7 events

18 Sep
2025

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Twenty-third report from Session 2024-26

15 Sep
2025

Correspondence

Letter from the Chief Executive and First Permanent Secretary of HM Revenue and Customs relating to the 23rd Report of Session 2024-25, The…

4 Sep
2025

Correspondence

Letter from the Chief Executive and First Permanent Secretary of HM Revenue and Customs relating to the 23rd Report of Session 2024-25, The…

30 Apr
2025

Report published

23rd Report - The cost of the tax system

27 Mar
2025

Correspondence

Letter from the Chief Executive and First Permanent Secretary for HM Revenue and Customs relating to providing further information requeste…

6 Mar
2025

Oral evidence

Oral evidence session

6 Mar
2025

Formal meeting (oral evidence session) · The Thatcher Room, Portcullis House

Committee event

Oral evidence sessions 1 session

6 Mar 2025

View on parliament.uk

Justin Holliday · HMRC Lucy Pink · HMRC Sir Jim Harra KCB · HMRC

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
23rd Report - The cost of the tax system	HC 645	30 Apr 2025	39	Responded

Recommendations & Conclusions

2 results

15 Conclusion Acknowledged

23rd Report - The cost of the tax …

Declining trust in HMRC attributes to substandard services and broader global governmental trends.

We asked about taxpayers’ declining trust in HMRC. HMRC said there had been a decline in trust globally with governments and with public bodies, and it was also subject to that decline. It told us that it had not been … Read more

Government Response

The government agrees with the observation about declining trust and outlines its ongoing efforts to improve trust, including understanding drivers, using customer surveys, and improving services and processes.

HM Treasury

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20 Conclusion Acknowledged

23rd Report - The cost of the tax …

Increased senior staff recruitment drives higher salary costs for HMRC compliance.

The Spending Reviews in 2020 and 2021 enabled HMRC to increase its compliance staffing. In 2021–22, CCG recruited mainly senior staff to undertake compliance work. Around the same time, HMRC was reducing its frontline customer service workforce, most of whom … Read more

Government Response

The government acknowledges the context of compliance staffing by detailing record compliance yield, plans to recruit an additional 5,500 staff by 2030, and expected productivity increases, implicitly justifying the investment in staff despite increased costs.

HM Treasury

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Government Response AI assessment · 35 of 4 classified

Accepted 31

Acknowledged 2

Not Addressed 2

Total 4 recs + 35 conclusions

Correspondence 3 letters

15 Sep 2025 To committee Letter from the Chief Executive and First Permanent Secretary of HM Revenue and Customs relating to the 23rd Report of Session 2024-25, The cost of the tax system, recommendation 4a, 08 September 2025

Parliament page

4 Sep 2025 To committee Letter from the Chief Executive and First Permanent Secretary of HM Revenue and Customs relating to the 23rd Report of Session 2024-25, The cost of the tax system, Recommendation 3, 4b, and 6, 17 July 2025

Parliament page

27 Mar 2025 To committee Letter from the Chief Executive and First Permanent Secretary for HM Revenue and Customs relating to providing further information requested in the oral evidence session held on 06 March 2025 on The cost of the tax system, 18 March 2025

Parliament page