The National Audit Office (NAO) have published 'Managing tax compliance following the pandemic'.  This report considers how well-placed HMRC is to manage its compliance work, its understanding of its compliance performance and whether it has a clear vision to manage the risks post-COVID.

The report concludes that:

  • COVID-19 had a significant impact on HMRC’s compliance work.
  • HMRC focussed on key priorities which reduced capacity for tax compliance activity.
  • Compliance yield reduced significantly during the pandemic.
  • The tax gap could grow as there is a risk that non-compliant taxpayers will pay the wrong amount of tax.
  • Action is needed over the next two years to manage such losses.
  • HMRC’s compliance work offers good value for taxpayer money.
  • Particular areas for improvement include:
    • Making its compliance yield measurement more robust.
    • Adjusting for errors included in calculating estimates.
    • Better understanding of how Tax Compliance Enquiries can lead to the wrong amount of tax being paid.

Useful guides on this topic

COVID-19: Taxation of coronavirus support payments
This guide summarises the tax treatment of grants paid during the Coronavirus pandemic.

COVID-19
COVID-19 zone: all about tax and financial support during the crisis

When the tax inspector calls...
This section looks at policy on tax strategies/avoidance and tax investigation news, including serious fraud and disclosure facilities. From time to time we comment on any other topical HMRC activity.

External links

Managing tax compliance following the pandemic


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