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 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.