HM Revenue and Customs: Annual Report and Accounts - Public Accounts Committee Contents

2  Business intelligence and workload management

Business intelligence systems

15. HMRC has not implemented the recommendations we made in 2004 and 2009 to use risk profiling of taxpayers to better target their collection activities. It has delayed fully implementing a project to enable systematic analyses of debt balances and debtor behaviours from April 2011 to October 2012.[52] HMRC acknowledged that it is not yet making full use of its investment in technology to analyse data. It is moving from 3,000 individual IT systems to a "big 13 systems". It will only be able to make full use of its data to target compliance activity effectively when that move is complete. It also told us that by then there would be more powerful systems on the market.[53]

Workload management

16. HMRC met its target to complete the end of year reconciliations for the 2008-09 and 2009-10 tax years by March 2012.[54] It subsequently cleared outstanding PAYE reconciliations relating to tax years 2003-04 to 2007-08 before its target date of December 2012.[55]

17. In November 2012 HMRC sent out letters about changes to Child Benefit to higher rate taxpayers who may need to join the self-assessment system. It acknowledged that the child benefit changes would be a big change for people affected and that it had found the implementation a challenging piece of work. However, it asserted that it was ready for the increase in self-assessment registrations and returns, the call centres were ready for calls, and the website was easy to use for taxpayers who needed advice on what to do.[56]

18. The next major change for the PAYE system is introducing Real Time Information (RTI), where employers must report employees' income tax and National Insurance deductions as they pay them rather than at the year-end. The Department for Work and Pensions' timetable to implement Universal Credit is driving the timetable to roll-out RTI and all employers have to be using RTI by October 2013.[57] HMRC acknowledges that the Institute of Chartered Accounts in England and Wales (ICAEW) and the Federation of Small Businesses have expressed concerns that many smaller enterprises will find the introduction of RTI onerous and many did not seem to be aware of the new requirements. HMRC told us that it is keen to understand where businesses have a real business dynamic that makes it hard to do what it is asking in terms of providing information to the Department. [58]

19. HMRC acknowledged that it still has a lot of work to do and that the Major Projects Authority had rated the RTI project as Amber.[59] On the 6th November 2012, just over 2 million employment records for 6,827 schemes had been migrated to RTI.[60] HMRC expects close to 39 million records to have migrated by October 2013.[61] HMRC expressed confidence that it is on track to deliver RTI by October 2013. HMRC also does not have a contingency plan in case RTI is delayed.[62]

52   C&AG's Report, para 3.18 - 3.19 Back

53   Q 99  Back

54   C&AG's Report, para 2.10  Back

55   Qq 152-153  Back

56   Qq 122-124  Back

57   C&AG's Report, para 2.25-2.26  Back

58   Qq 126, 137-141  Back

59   Qq 116-118 Back

60   Qq 131, Ev 51 Back

61   Q 136  Back

62   Qq 145-146 Back

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Prepared 3 December 2012