In its report HMRC performance 2019/20, the Public Accounts Committee highlights those groups of taxpayers who have received no financial support during the covid-19 pandemic, having fallen outside the terms of the government support schemes. The PAC notes that ‘some of the workforce has ‘not had a penny’ even though lockdowns and tier restrictions mean some cannot work at all – while some large companies that have taken taxpayer support have continued to pay out dividends and high executive salaries.’ Alongside a number of criticisms, the report acknowledges the ‘hard work and dedication of HMRC staff in rising to the challenge under difficult circumstance’.
The PAC’s report sets out a number of conclusions and recommendations:
Taxpayer groups have been excluded from support: HMRC is urged to publish an urgent explanation of why it has been unable to help those groups excluded from the various support schemes and to ‘set out steps it can take to overcome those obstacles’, including considering support it could provide for taxpayers who were pre-emptively moved onto payrolls in anticipation of the IR35 changes.
Lack of certainty around covid-19 support schemes: The PAC submits that lack of certainty has undermined businesses’ ability to plan effectively. HMRC is asked to set out lessons learned from the timing and content of its communications, particularly in relation to the job retention scheme, and how those lessons might have improved the outcomes of the support schemes.
HMRC’s real estate strategy: Given the PAC’s previous concerns around locking HMRC into long-term property leases, and the likely new ways of working following the pandemic, HMRC is asked to set out its future plans for how it will review its estate strategy.
HMRC capacity to manage its increased workload: In May 2020, HMRC had reassigned more than 9,000 staff to covid-related work. The continuing pressure from the pandemic, alongside the demands of Brexit and the department’s regular work and modernisation plans present a ‘huge operational challenge’. HMRC should review its priorities with the Treasury to ensure it has capacity to manage its workload including, if necessary, consideration of what it might need to deprioritise if sufficient additional resources are not secured.
Modernisation of HMRC IT systems: The PAC notes that HMRC has had to spend too much on patching up legacy IT systems and should set out, by the end of March 2021, its plans for IT investment on modernisation for the future, to reduce the need to ‘simply keep patching up legacy systems’.
Reliable and timely financial estimates are essential: Robust financial estimates are vital if HMRC is to manage and allocate resources effectively, but the PAC notes examples where HMRC has struggled, including on its assessment of the level of error and fraud from the covid-19 support schemes. The PAC asks HMRC to set out steps it is taking to improve its financial estimates, and to report back on when it will have an estimate of actual error and fraud in the covid schemes including its plans for recovering those losses.
In its report HMRC performance 2019/20, the Public Accounts Committee highlights those groups of taxpayers who have received no financial support during the covid-19 pandemic, having fallen outside the terms of the government support schemes. The PAC notes that ‘some of the workforce has ‘not had a penny’ even though lockdowns and tier restrictions mean some cannot work at all – while some large companies that have taken taxpayer support have continued to pay out dividends and high executive salaries.’ Alongside a number of criticisms, the report acknowledges the ‘hard work and dedication of HMRC staff in rising to the challenge under difficult circumstance’.
The PAC’s report sets out a number of conclusions and recommendations:
Taxpayer groups have been excluded from support: HMRC is urged to publish an urgent explanation of why it has been unable to help those groups excluded from the various support schemes and to ‘set out steps it can take to overcome those obstacles’, including considering support it could provide for taxpayers who were pre-emptively moved onto payrolls in anticipation of the IR35 changes.
Lack of certainty around covid-19 support schemes: The PAC submits that lack of certainty has undermined businesses’ ability to plan effectively. HMRC is asked to set out lessons learned from the timing and content of its communications, particularly in relation to the job retention scheme, and how those lessons might have improved the outcomes of the support schemes.
HMRC’s real estate strategy: Given the PAC’s previous concerns around locking HMRC into long-term property leases, and the likely new ways of working following the pandemic, HMRC is asked to set out its future plans for how it will review its estate strategy.
HMRC capacity to manage its increased workload: In May 2020, HMRC had reassigned more than 9,000 staff to covid-related work. The continuing pressure from the pandemic, alongside the demands of Brexit and the department’s regular work and modernisation plans present a ‘huge operational challenge’. HMRC should review its priorities with the Treasury to ensure it has capacity to manage its workload including, if necessary, consideration of what it might need to deprioritise if sufficient additional resources are not secured.
Modernisation of HMRC IT systems: The PAC notes that HMRC has had to spend too much on patching up legacy IT systems and should set out, by the end of March 2021, its plans for IT investment on modernisation for the future, to reduce the need to ‘simply keep patching up legacy systems’.
Reliable and timely financial estimates are essential: Robust financial estimates are vital if HMRC is to manage and allocate resources effectively, but the PAC notes examples where HMRC has struggled, including on its assessment of the level of error and fraud from the covid-19 support schemes. The PAC asks HMRC to set out steps it is taking to improve its financial estimates, and to report back on when it will have an estimate of actual error and fraud in the covid schemes including its plans for recovering those losses.
