Since March 2020, HM Revenue & Customs (HMRC) has had to implement a vital part of the government response to the COVID-19 pandemic, to help as many people as possible as fast as possible. We recognise the hard work and dedication of HMRC staff in rising to the challenge under difficult circumstances. The Department has already provided more than £80 billion as part of a wider package in support to businesses and individuals, including through the employment support schemes. However, despite HMRC’s efforts, some groups have not received from financial support offered to other taxpayers.
The demands created by the pandemic have put a huge strain on HMRC’s day to day operations and the pandemic has had a significant impact on HMRC’s performance, in terms of, for example, falling tax revenues, poorer customer service, reduced compliance activity and increased debt balances. HMRC has yet to establish the full impact of COVID-19 and the support schemes on tax receipts. On top of the constant need for maintaining and improving its administration of the tax system, HMRC already faced a number of strategic challenges: its progress and plans to transform the tax system and its preparations for the end of the transition period following the UK’s exit from the EU. The pandemic has significantly increased HMRC’s workload and its complexity. The Department will need to review whether it has the resources and capacity to deliver on all of its commitments.