We are concerned that HMRC may be overstating the impact of its compliance work, and that it is overcharging some taxpayers. HMRC tests 400 of its completed compliance cases each year. In 2021–22, 80 of these cases had errors in the compliance yield recorded, which were skewed towards overstating yield. HMRC’s testing also found seven cases where it had overcharged the taxpayers by a total of £32 million. HMRC says that it has controls in place to prevent over-recording of yield but acknowledges that it does not know to what extent the errors identified are representative of compliance yield as a whole being overstated. HMRC also cannot estimate how many taxpayers it is overcharging following compliance enquiries, or by how much. It says that there has been a slight improvement in the quality of its casework in the past year but acknowledges that the number of overcharges identified in its sample testing is too high. HMRC has agreed to update its testing approach so that it can better estimate the extent of errors it makes. Recommendation 5: a) HMRC should develop statistically robust estimates of the level of error in its compliance yield measure, and how far taxpayers are overcharged. Managing tax compliance following the pandemic 7 b) HMRC should demonstrate it has taken all proportionate steps to identify and correct overcharges. It should make clear what compensation is available if taxpayers are overcharged.