The Public Accounts Committee has published a report HMRC performance in 2021/22 which is highly critical of HMRC approach to compliance and its levels of customer service.
Although HMRC collected £731.1bn in taxes and duties in 2021/22, which is the highest on record, it is still not deploying the resources required to maximise the tax revenues, according to the report. Currently, £42bn is still outstanding in unpaid tax, and HMRC is failing to collect around 5% of the tax it is owed each year.
The report is also highly critical of HMRC lack of ambition to tackle fraud and error and recover Covid-19 support schemes losses, only expecting to recover around a quarter of the estimated £4.5bn lost to fraud and error. Fraud and error are also high for R&D tax reliefs, which are ‘costly, prone to abuse and provide questionable benefit to the UK economy’. Problems with VAT’s susceptibility to fraud appear to be better managed in other European jurisdictions.
The report also says that HMRC’s declining customer service performance is not acceptable to the taxpayers or agents. MPs are unconvinced that HMRC’s plans to address this by directing enquiries to digital channels will reduce demand or deal with the poor level of service quickly enough.
Dame Meg Hillier MP, chair of the committee, said ‘the public purse will continue missing out on billions of desperately needed revenues as HMRC will only employ more staff to tackle compliance over the next few years – that’s not fast enough to dent the tax gap at a time of huge public sector spending pressures’.
The Public Accounts Committee has published a report HMRC performance in 2021/22 which is highly critical of HMRC approach to compliance and its levels of customer service.
Although HMRC collected £731.1bn in taxes and duties in 2021/22, which is the highest on record, it is still not deploying the resources required to maximise the tax revenues, according to the report. Currently, £42bn is still outstanding in unpaid tax, and HMRC is failing to collect around 5% of the tax it is owed each year.
The report is also highly critical of HMRC lack of ambition to tackle fraud and error and recover Covid-19 support schemes losses, only expecting to recover around a quarter of the estimated £4.5bn lost to fraud and error. Fraud and error are also high for R&D tax reliefs, which are ‘costly, prone to abuse and provide questionable benefit to the UK economy’. Problems with VAT’s susceptibility to fraud appear to be better managed in other European jurisdictions.
The report also says that HMRC’s declining customer service performance is not acceptable to the taxpayers or agents. MPs are unconvinced that HMRC’s plans to address this by directing enquiries to digital channels will reduce demand or deal with the poor level of service quickly enough.
Dame Meg Hillier MP, chair of the committee, said ‘the public purse will continue missing out on billions of desperately needed revenues as HMRC will only employ more staff to tackle compliance over the next few years – that’s not fast enough to dent the tax gap at a time of huge public sector spending pressures’.
