Thirty-Sixth Report - HMRC performance 2019–20

Select Committee

Public Accounts Committee HC 690 20 January 2021

Report Status Government responded

Conclusions & Recommendations 26 items (6 recs)

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Government Response (AI assessment · 25 of 26 classified)

Accepted 14

Acknowledged 4

Deferred 1

Not Addressed 5

Rejected 1

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Thirty sixth report from Session 2019-21 · published 26 Mar 2021

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Recommendations & Conclusions

5 results

11 Conclusion Acknowledged

“Building Our Future Locations” is one of the major programmes in HMRC’s transformation portfolio.

Conclusion

“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 Summary

The government acknowledges the committee's conclusion (despite referring to it as a recommendation) and reiterates its satisfaction with the value for money of its estates strategy, confirming it will review future space requirements and work with the Government Property Agency to make freed-up space available to other departments.

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13 Conclusion Acknowledged

We asked the Department if it had taken on any more leases on a 25-year...

Conclusion

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 Summary

The government acknowledges the committee's conclusion regarding new leases, reiterating its satisfaction with its estates strategy, and stating it will review future space requirements while working with the Government Property Agency to manage available space for other departments.

HM Treasury

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14 Conclusion Acknowledged

Following our April 2018 session we had questioned whether the regional office deals HMRC had...

Conclusion

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 Summary

The government acknowledges the committee's conclusion on the flexibility of its regional office deals, defending its estates strategy and stating it will review future space requirements and work with the Government Property Agency to manage available space for other departments.

HM Treasury

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17 Conclusion Acknowledged

COVID-19, and HMRC’s role in the government’s response, has had a significant impact on the...

Conclusion

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 Summary

The government acknowledges the committee's conclusion on the impact of COVID-19 on HMRC operations and customer service, outlining significant funding allocated through the 2020 Spending Review for customs, IT, and tax digitalisation, and stating it is reviewing 2021-22 priorities and will publish its Outcome Delivery Plan.

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25 Conclusion

HMRC’s latest estimate of the level of error and fraud in tax credits indicates that...

Conclusion

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 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 rate of 4.9% is lower than HMRC’s forecast of 6.2%.71 HMRC told us that fraud and error will continue to be a feature of tax credits and that getting the fraud and error level significantly below 5%, its ministerial target, will be “extremely challenging”.72 We asked the Department whether it is able to provide us with more rigorous estimates of the level of fraud and error in tax reliefs, particularly the Research & Development (R&D) tax relief, which cost £8.8 billion in 2019–20. HMRC told us that for some reliefs, such as the R&D relief, it is able to quantify the level of non-compliance because taxpayers have to claim the relief. In contrast, for tax reliefs that are not claimed but simply granted to those eligible, HMRC needs to make estimates based on indirect data. HMRC estimates the level of fraud and error associated with the R&D tax reliefs to be 3.6% (£311 million in 2019–20) of the tax relief expenditure. However, as highlighted by the Comptroller and Auditor General, HMRC’s current estimate of error and fraud in R&D reliefs is based upon a series of judgements about how likely it is that cases of detected error and fraud are likely to occur within the larger population of unreviewed cases. HMRC does not yet have 66 Qq 75–76 67 HM Treasury, Spending Review 2020, CP 330, November 2020. 68 Q 51 69 Qq 15–17; HM Revenue & Customs Annual Report and Accounts 2019–20, The Resource Accounts: Certificate and Report of the Comptroller and Auditor General to the House of Commons, HC 891, 5 November 2020 70 HM Revenue & Customs Annual Report and Accounts 2019–20, Trust Statement, note 6.3 71 C&AG’s Report, para 16 & 17 72 Qq 83, 85 18 HMRC performance 2019–20 a sufficiently developed understanding of the error and fra Show less

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