We asked HMRC whether it would generate more revenue if it concentrated more of its compliance activities on large companies and less on small businesses and individuals. It told us that payback was a key factor when deciding how to deploy its resources, but not the only one. HMRC added that the marginal yield from additional compliance spending would not necessarily be as high as average yield. It also told us that its compliance work had to cover all aspects of the tax gap and that small businesses account for a large proportion of that gap. It explained that tackling non-compliance in small businesses was quite expensive and thus the rate of return is lower. It also said it constantly adjusted the amount of resource that it put into the directorates that cover its different customer groups.32