Forty-Ninth Report - Managing tax compliance following the pandemic
Select Committee
Public Accounts Committee
HC 739
3 May 2023
Recommendations
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Conclusions (3) Observations and findings — click to expand
3
Conclusion
Not Addressed
Compliance yield fell during the pandemic, and HMRC does not know what level it should be targeting with its current resources. In the five years before the pandemic, HMRC collected on average around 5.2% of tax revenues through its compliance work. This fell significantly during the pandemic, initially to 5.0% …
Government Response Summary
The government response provided only states a different PAC conclusion (number 4) and does not contain a response to Recommendation 3 regarding compliance yield targets.
6
Conclusion
Not Addressed
There are signs that the tax gap may grow, and that HMRC does not have the operational resilience needed to deal with this. HMRC is funded to stop the tax gap from growing. The tax gap is an important measure of how much revenue may be missed—due to evasion, avoidance …
Government Response Summary
The government response provided addresses a recommendation to the Cabinet Office regarding contingency plans for the Shared Services Strategy, which is entirely unrelated to the committee's recommendation concerning HMRC's operational resilience and tax gap capacity.
1
Conclusion
Not Addressed
On the basis of a report by the Comptroller and Auditor General, we took evidence from HM Revenue & Customs (HMRC) regarding the challenges to tackle non-compliance during and following on from the pandemic.1
Government Response Summary
The government acknowledges that the Committee took evidence from HM Revenue and Customs based on a report by the National Audit Office.