Written evidence submitted by TaxWatch (HCSA0002)

TaxWatch is delighted that the PAC has issued its latest call for evidence focussed on the performance of HMRC, complimenting prior work done by the Treasury Select Committee and the NAO in recent years to which we’ve provided evidence.

TaxWatch is a small UK registered charity and think tank publishing research and investigations into tax avoidance and administration. We were established in 2018 and the staff are current or former members of the Chartered Institute of Taxation (CIOT), having worked in practice and with research backgrounds. More details of our work can be found on our website www.taxwatchuk.org.

Within the time constraints (11 calendar days) and available resources TaxWatch limit ourselves to making the Committee aware of the most relevant and up to date findings – primarily summarised in our long form State of Tax Administration 2024 report published just last month on our website here: State of Tax Administration 2024 – TaxWatch (taxwatchuk.org). Whilst this evidence isn’t unpublished so might not be strictly admissible as original evidence for PAC we wanted to draw the committee’s awareness to it as we spent many weeks assembling the information and data requests which directly overlap with this inquiry.

Monthly performance data including for August 2024 which was not available at the time we finalised SOTA shows that even over the summer (which are the quietest months for customer service demand) HMRC remain so far away from their targets in relation to call handling and ‘one and done’ interactions, published here: HMRC monthly performance report: August 2024 - GOV.UK (www.gov.uk).

Further to this we observe that the additional resources pledged to HMRC in last week’s Autumn Budget 2024 to improve the department’s performance are wholly in relation to compliance officers despite findings such as the ARC Funding the Nation report here (Report - Funding the Nation Campaign). This report concluded, and TaxWatch wholly concur, that customer service needs to accompany compliance as the two major functions complement each other – if taxpayers needs aren’t met as interacting with HMRC becomes exceptionally difficult then voluntary compliance on which the regime depends gets eroded, exacerbating the tax gap.

November 2024