The NAO has published its report on the impact of the Covid pandemic on HMRC’s compliance activities.
The report includes the following observations:
- HMRC had to adapt at short notice to the Covid challenges.
- Those challenges included implementation of the Covid support schemes and of additional support to taxpayers.
- The redeployment of staff meant that the HMRC capacity for compliance work was reduced.
- The main impact of the pandemic was to reduce the amount of time HMRC could spend on identifying non-compliance after the event (as opposed to the up-front encouragement of voluntary compliance).
According to the report, HMRC estimate that “at least 10%” of taxes that are due would not be paid without HMRC’s compliance work, and that such compliance work normally reduces that figure by about half.