Question to the HM Treasury:

To ask His Majesty's Government what plans they have to increase the number of tax compliance investigations.

HMRC closed 256,000 civil compliance checks in 2021-22, up from 248,000 the previous year. Compliance yield fell during the pandemic as we reprioritised work recognising the challenges faced by individuals and businesses. Any compliance risks that we did not pick up during the Covid period are still there and available for us to work.

The most efficient way to get tax right across 45 million individuals and 5 million businesses is for HMRC to guide the taxpayer by intervening before anything has the chance to go wrong. That includes things like prompts built into the online Self Assessment System, which flag when a customer’s entry is out of line with what is expected. It also includes creating policies that make it easy for people to do the right thing and in a way that makes some historical forms of non-compliance nearly impossible.

HMRC’s approach is underpinned by cutting-edge data analysis, which we use to identify where tax is most at risk of not being paid and design tailored, targeted and proportionate interventions to address it. A ‘compliance check’ allows us to investigate someone’s tax affairs if we think they may not be paying the right amount of tax.

The Government continues to invest in HMRC to ensure the right amount of tax is paid. For example, new measures were announced at the Autumn Statement 2022 which are forecast to raise £1.7 billion in tax revenue over the next five years.