HMRC performance in 2019-20

Public Accounts Committee Closed Inquiry
Opened: 4 Nov 2020 Closed: 25 Mar 2021 Parliament page
Every year the NAO prepares a report on HMRC’s performance and efficiency in the previous accounting year, which is published alongside the HMRC’s Annual Report and Accounts when they are laid in Parliament – for 2019-20’s accounts this is expected in early November. Soon after, the Committee will take evidence … Read more
1 Recommendation
25 Conclusions
1 Report
1 Oral session
3 Letters
1 Event
Activity timeline 7 events
10 Jun
2021
Correspondence
26 Mar
2021
Report published
26 Mar
2021
Correspondence
16 Mar
2021
Correspondence
20 Jan
2021
Report published
16 Nov
2020
Oral evidence
16 Nov
2020
Formal meeting (oral evidence session) · The Boothroyd Room, Portcullis House
Oral evidence sessions 1 session
16 Nov 2020
View on parliament.uk
HMRC Standard Report
Angela MacDonald · HMRC Jim Harra · HMRC Justin Holliday · HMRC
Title HC No. Published Items Response
Thirty-Sixth Report - HMRC performance 2019–20 HC 690 20 Jan 2021 26 Responded
Recommendations & Conclusions
26 results
2 Conclusion
Thirty-Sixth Report - HMRC perform…
A lack of certainty about the COVID-19 support schemes has undermined businesses’ ability to plan...
A lack of certainty about the COVID-19 support schemes has undermined businesses’ ability to plan effectively. We recognise that it is not easy to provide support to everyone considering the unique circumstances of each individual and business. However, the uncertainties … Read more
Government Response
2. 1 The government agrees with the Committee’s recommendation. Ta rget implementation date: March 2021 2.2 The government has had to balance providing longer-term certainty on the schemes with the … Read more
HM Treasury
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3 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC’s estate strategy risks becoming woefully out of date.
HMRC’s estate strategy risks becoming woefully out of date. Our long-standing concerns about HMRC’s non-breakable long-term property leases have become all the more relevant, and prescient, given the COVID-19 pandemic. In April 2017, long before COVID-19, we raised our concerns … Read more
Government Response
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the … Read more
HM Treasury
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4 Recommendation
Thirty-Sixth Report - HMRC perform…
The pandemic has significantly increased HMRC’s workload and made the organisation more complex.
The pandemic has significantly increased HMRC’s workload and made the organisation more complex. HMRC has had to reallocate a significant number of its staff to work in COVID-19-related roles. At its peak, in May 2020, HMRC reallocated more than 9,000 … Read more
HM Treasury
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5 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC has spent too much of its IT budget on patching up legacy systems rather...
HMRC has spent too much of its IT budget on patching up legacy systems rather than modernising them. The COVID-19 pandemic has shown the importance of an effective tax administration system. There is a strong case for investment in a … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department has been addressing its legacy technical debt since 2019 and received funding of £268 million at the … Read more
HM Treasury
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6 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC too often struggles to provide reliable and timely financial estimates upon which good financial...
HMRC too often struggles to provide reliable and timely financial estimates upon which good financial and operational planning depends. HMRC is responsible for dealing with vast sums of public money, both revenue and expenditure. Reliable and timely financial estimates are … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The government does not accept that HMRC “too often struggles to provide reliable and timely financial estimates upon which … Read more
HM Treasury
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1 Conclusion
Thirty-Sixth Report - HMRC perform…
On the basis of a Report by the Comptroller and Auditor General, we took evidence...
On the basis of a Report by the Comptroller and Auditor General, we took evidence from HM Revenue & Customs (HMRC) on its performance in 2019–20.1
Government Response
1.1 The Government agrees with the Committee’s recommendation. Recommendation implemented 1.2 Following the Committee’s COVID-19: Support for Jobs report, HM Revenue & Customs and HM Treasury wrote to the Committee … Read more
HM Treasury
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7 Conclusion
Thirty-Sixth Report - HMRC perform…
Following our evidence session HMRC added that people with more than one employment can be...
Following our evidence session HMRC added that people with more than one employment can be furloughed simultaneously by different employers and that eligible employees can be on any type of employment contract, including “IR35, umbrella company and agency working”. With … Read more
Government Response
1.1 The Government agrees with the Committee’s recommendation. Recommendation implemented 1.2 Following the Committee’s COVID-19: Support for Jobs report, HM Revenue & Customs and HM Treasury wrote to the Committee … Read more
HM Treasury
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8 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC is responsible for administering several government interventions in response to COVID-19.
HMRC is responsible for administering several government interventions in response to COVID-19. These include: grant-paying measures, such as the Coronavirus Job Retention Scheme and Eat Out to Help Out; measures to defer payments of tax liabilities, such as deferring VAT … Read more
Government Response
The primary support measures for individuals and businesses administered by HMRC include: grant-paying measures, such as the Coronavirus Job Retention Scheme (CJRS) and the Self- Employment Income Support Scheme (SEISS); … Read more
HM Treasury
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9 Conclusion
Thirty-Sixth Report - HMRC perform…
We asked HMRC whether it had carried out any evaluation of the Eat Out to...
We asked HMRC whether it had carried out any evaluation of the Eat Out to Help Out scheme to inform its possible reintroduction.23 The scheme allowed customers, at participating establishments, to get a 50% discount on food or non-alcoholic drinks … Read more
Government Response
2. 1 The government agrees with the Committee’s recommendation. Ta rget implementation date: March 2021 2.2 The government has had to balance providing longer-term certainty on the schemes with the … Read more
HM Treasury
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10 Conclusion
Thirty-Sixth Report - HMRC perform…
We asked HMRC whether the Coronavirus Job Retention Bonus scheme had been cancelled or just...
We asked HMRC whether the Coronavirus Job Retention Bonus scheme had been cancelled or just delayed.26 The scheme would have granted a one-off payment to employers of £1,000 for every employee who they previously claimed for under the Coronavirus Job … Read more
Government Response
2. 1 The government agrees with the Committee’s recommendation. Ta rget implementation date: March 2021 2.2 The government has had to balance providing longer-term certainty on the schemes with the … Read more
HM Treasury
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11 Conclusion
Thirty-Sixth Report - HMRC perform…
“Building Our Future Locations” is one of the major programmes in HMRC’s transformation portfolio.
“Building Our Future Locations” is one of the major programmes in HMRC’s transformation portfolio. It consists of creating 13 regional centres, redeploying staff and disposing of buildings.31 In terms of the impact of the COVID-19 pandemic on HMRC’s plans for … Read more
Government Response
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the … Read more
HM Treasury
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12 Conclusion
Thirty-Sixth Report - HMRC perform…
We questioned the Department on its policy of entering into non-breakable 25-year lease agreements, which...
We questioned the Department on its policy of entering into non-breakable 25-year lease agreements, which we had criticised in the past. We wanted to know whether the impact of the pandemic on the commercial property market, such as falling rents … Read more
Government Response
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the … Read more
HM Treasury
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13 Conclusion
Thirty-Sixth Report - HMRC perform…
We asked the Department if it had taken on any more leases on a 25-year...
We asked the Department if it had taken on any more leases on a 25-year non- breakable basis in the last year. HMRC said its estate strategy had not changed in the last year and it did not think it … Read more
Government Response
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the … Read more
HM Treasury
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14 Conclusion
Thirty-Sixth Report - HMRC perform…
Following our April 2018 session we had questioned whether the regional office deals HMRC had...
Following our April 2018 session we had questioned whether the regional office deals HMRC had struck would offer sufficient flexibility to cope if plans did not work out as intended.38 In our 2020 evidence session HMRC told us that it … Read more
Government Response
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the … Read more
HM Treasury
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15 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC told us it still believed the most cost-effective way of getting good deals in...
HMRC told us it still believed the most cost-effective way of getting good deals in the property market is to enter into long-term leases. The Department explained to us that its regional centres are in “attractive locations” and if it … Read more
Government Response
3.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department is satisfied that its estates strategy continues to offer value for money in the … Read more
HM Treasury
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16 Conclusion
Thirty-Sixth Report - HMRC perform…
We asked the Department to write to us about how its recruitment and location policy...
We asked the Department to write to us about how its recruitment and location policy would reflect the ‘levelling-up agenda’.43 HMRC subsequently wrote to us to explain that it was supporting the government’s levelling-up agenda by helping ensure the Civil … Read more
Government Response
3.3 Before making contractual commitments for its regional centres, the department obtained independent qualified professional advice which confirmed that the flexible lease terms they negotiated offer the best balance of … Read more
HM Treasury
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17 Conclusion
Thirty-Sixth Report - HMRC perform…
COVID-19, and HMRC’s role in the government’s response, has had a significant impact on the...
COVID-19, and HMRC’s role in the government’s response, has had a significant impact on the Department’s operations. Most of HMRC’s staff are working from home and it has reallocated many of them to support the COVID-19 measures. HMRC told us … Read more
Government Response
4.1 The government agrees with the Committee’s recommendation. Target implementation date: April 2021 4.2 The department was allocated £5.4 billion through the 2020 Spending Review. This included funding of: • … Read more
HM Treasury
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18 Conclusion
Thirty-Sixth Report - HMRC perform…
In terms of its compliance work, restrictions on travel and social distancing have affected HMRC’s...
In terms of its compliance work, restrictions on travel and social distancing have affected HMRC’s ability to visit taxpayers and many businesses have not been operating. HMRC told us that while it has restarted some of its criminal investigations, it … Read more
Government Response
4.2 The department was allocated £5.4 billion through the 2020 Spending Review. This included funding of: • £1 billion to reform and enhance UK’s customs system; • £146 million to … Read more
HM Treasury
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19 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC told us that it has a significant debt balance, about £27 billion, which is...
HMRC told us that it has a significant debt balance, about £27 billion, which is not in any payment arrangement and has increased mainly as a result of policy decisions to allow taxpayers to defer their tax payments. HMRC aims … Read more
Government Response
4.2 The department was allocated £5.4 billion through the 2020 Spending Review. This included funding of: • £1 billion to reform and enhance UK’s customs system; • £146 million to … Read more
HM Treasury
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20 Conclusion
Thirty-Sixth Report - HMRC perform…
We asked HMRC about it plans to tackle fraud and error in the COVID-19 support...
We asked HMRC about it plans to tackle fraud and error in the COVID-19 support schemes while ensuring the timely payments of support to those in need. HMRC explained that it has to strike a balance between helping as many … Read more
Government Response
6.6 The government agrees with the Committee’s recommendation. Recommendation implemented 6.7 The department will not have a complete assessment of the total fraud and error for the CJRS until the … Read more
HM Treasury
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21 Conclusion
Thirty-Sixth Report - HMRC perform…
As HMRC moves towards a fully digital tax system, the capability of its IT systems,...
As HMRC moves towards a fully digital tax system, the capability of its IT systems, including in terms of cyber security, will become increasingly important to HMRC’s ability to operate effectively. HMRC has recognised that, due to the need in … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department has been addressing its legacy technical debt since 2019 and received funding of £268 million at the … Read more
HM Treasury
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22 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC told us that it spends too much of its IT budget on maintaining its...
HMRC told us that it spends too much of its IT budget on maintaining its legacy estate and not enough on investment for the future and modernisation. The Department will seek funding opportunities, such as Spending Reviews, to modernise its … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department has been addressing its legacy technical debt since 2019 and received funding of £268 million at the … Read more
HM Treasury
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23 Conclusion
Thirty-Sixth Report - HMRC perform…
We asked about the success of the Department’s transformation plans following the ambition it set...
We asked about the success of the Department’s transformation plans following the ambition it set itself in 2015 to “become one of the most digitally advanced tax administrations in the world”. HMRC considers that, although it is not the most … Read more
HM Treasury
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24 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC handles large sums of money, both collecting and paying out.68 It relies on financial...
HMRC handles large sums of money, both collecting and paying out.68 It relies on financial estimates in various different contexts to help achieve its objectives. Yet we have recently seen several examples where there have been mistakes in those estimates. … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The government does not accept that HMRC “too often struggles to provide reliable and timely financial estimates upon which … Read more
HM Treasury
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25 Conclusion
Thirty-Sixth Report - HMRC perform…
HMRC’s latest estimate of the level of error and fraud in tax credits indicates that...
HMRC’s latest estimate of the level of error and fraud in tax credits indicates that overpayments by HMRC decreased from 5.5% (£1.41 billion) of expenditure on tax credits in 2017–18 to 4.9% (£1.11 billion) in 2018–19. The estimated 2018–19 overpayment … Read more
HM Treasury
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26 Conclusion
Thirty-Sixth Report - HMRC perform…
Regarding the COVID-19 support schemes, we asked HMRC whether it had estimated the level of...
Regarding the COVID-19 support schemes, we asked HMRC whether it had estimated the level of fraud and error in the Eat Out to Help Out scheme considering the scheme had ended at the end of August. HMRC confirmed to us … Read more
Government Response
6.6 The government agrees with the Committee’s recommendation. Recommendation implemented 6.7 The department will not have a complete assessment of the total fraud and error for the CJRS until the … Read more
HM Treasury
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Correspondence 3 letters
10 Jun 2021 Correspondence from Jim Harra, Chief Executive and First Permanent Secretary, re HMRC Performance 19-20 – Recommendation 4, dated 24 May 2021
Parliament page
26 Mar 2021 Correspondence from Angela MacDonald, Deputy CEO & Second Permanent Secretary, HMRC Executive Committee, re Public Account Committees report HMRC Performance report 2019-2020 In response to Recommendation 1, dated 22 March 2021
Parliament page
16 Mar 2021 Correspondence from Jim Harra Chief Executive and First Permanent Secretary HMRC, re HMRC Performance 19-20 – Recommendation 2, dated 8 March 2021
Parliament page