UK tax collector falls short on digital efficiency, watchdog says

The UK’s tax collector is yet to reach the levels of efficiency its investment in digital services has led auditors to expect, according to a new report. In its annual report on the performance of His Majesty’s Revenue & Customs (HMRC), the National Audit Office (NAO) has set out the challenges facing one of the biggest IT …

[Pascal Monett]

“HMRC has not yet achieved"

Neither has fusion. I'm betting that we'll have fusion energy before HMRC achieves anything.

[elsergiovolador]

Re: “HMRC has not yet achieved"

HMRC works very well, just not for the British people.

[ParlezVousFranglais]

Re: “HMRC has not yet achieved"

It's all just TITSUP*

*Taking Income Tax Showcases Unacceptable Productivity

[Anonymous Coward]

Re: “HMRC has not yet achieved"

They’d be better just ‘investing’ the money in extra tax officers … to sort out the horrendous customer service issue and also chase down - with the same gusto as benefit fraud, chasing carers over 60p overages and the current child benefit ‘I have not emigrated’ foul-up - systemic tax evasion by corporations, the self-employed, middle-class and above. That is demonstrable in paying for itself and having a huge surplus.

[elsergiovolador]

Hopelessly Mismanaged Revenue Circus

It is funny how nobody raise eyebrows that HMRC hires overseas tax avoiding corporations instead of investing in homegrown talent.

Then they have pikachu face nothing is working.

But on the other hand, what techie Brit would like to work for an organisation that colluded with big consultancies to crush competition from small business?

I suppose they got what they wished for.

[Like a badger]

Re: Hopelessly Mismanaged Revenue Circus

Don't be too harsh on HMRC, they operate according to the prevailing government who insist everything is outsourced, and refuse to allow better public sector salaries for tech roles that might result in HMRC actually having control of its own tech.

The current government are certainly chaotic, but they've only had a year in post, the Tories can take the full credit for having 14 years to resolve messes like this, and refusing to make a single positive step.

[elsergiovolador]

Re: Hopelessly Mismanaged Revenue Circus

and funny how no one is looking into why the things are the way they are.

One tell tale is that hiring overseas corporation makes audit so much more complex, so if there are any skeletons, they are mostly out of reach, especially when SFO or NCA keep heads in the sand and NAO does barely more than box ticking.

[Anonymous Coward]

Ho-Hum here we go again ... again ... again ... again ... ... ... ...

I will once again 'attack' the Civil Service as this is yet another example of the Civil Service playing the usual games.

You 'play the game' make all the right noises to say you will achieve efficiencies IF you just spend £1Billion or so.

'Friends' AKA vendors pockets lined, Civil Service shown as being 'up to date & with the cool kids' ... But but but ...look at the savings we will make !!!

Some time later ... Hmmm!!! ... still working on the savings, come back later !!!

Continue doing things the 'Civil Service way' ... the 'ONLY' way ... repeat ad infinitum !!!#

P.S.

YES ... I know the job is hard and you have to contend with idiot MP's changing direction all the time BUT the Civil Service has the experience of doing these big changes yet never seems to learn from the failures. The Civil Service is constant while govts change, why do they not have the skills, by now, to deliver things.

:)

[Anonymous Coward]

Re: Ho-Hum here we go again ... again ... again ... again ... ... ... ...

I'm a civil servant, and I'd agree with you.

There's some important differences in public sector work that so much of it has to be made public, whereas a private sector project usually won't have to publicly admit that its budgeted costs were under-estimated, that delivery has been delayed, or that the benefits are lower or later than the business case. My extensive private sector experience is that most large systems changes are late, over-budget, and the unforecast costs of disruption take a big chunk out of the benefits, themselves often over-egged to meet a corporate rate of return hurdle. But that rarely comes out unless it's a colossal screw up (eg Asda's digital divorce from Walmart, or an energy supplier who screw up their CRM and then get a big fat fine from the regulator).

What is needed is:

1) More of a grip on initial project cost estimates so that they reflect what's likely, not what fits in the department's budget allocation.

2) Benefits and transition costs needs to be more pessimistic - and if that means the business case fails, so be it.

3) Actually ensure learning takes place. Maybe take somebody who's been the senior responsible officer for a major screwup, give them a PACE-style interview to see if they've learned anything. If they haven't sack them, if they have then make them SRO for another high risk project and tell them to get a grip or get out.

4) A more punitive approach to suppliers who screw up, and procurement rules that REQUIRE bidders to declare prior involvement in any prior project that's in trouble, and REQUIRES civil servants to take account of this past performance.

5) Stop senior civil servants flitting between jobs to dodge accountability, perhaps with minimum job terms of five years in post before they can apply for other roles.

[Anonymous Coward]

Re: Ho-Hum here we go again ... again ... again ... again ... ... ... ...

...Actually ensure learning takes place...

Lol, I see we've had similar past experiences.

[elsergiovolador]

Re: Ho-Hum here we go again ... again ... again ... again ... ... ... ...

What needed is audit and investigation why tenders always go to usual suspects and why HMRC actively worked to help destroy their competition.

Your list is a classic civil service box ticking exercise that will not lead to any improvement.

[Anonymous Coward]

Re: Ho-Hum here we go again ... again ... again ... again ... ... ... ...

It's the public sector (not just the civil service) disease.

Speaking as a public servant I cringe any time the efficiency word is used because it will always end the same way - lots of money is spent, not much (if any) efficiency is gained.

Why? Waves dispondent hand drunkenly... because. Culture, empire building, resistance to change (that is meaningful change not just rearranging the deckchairs every few years), a complete and utter failure to properly understand and describe the problem before you wander off trying to make the "natives" more efficient, etc.

Fundamentally take a (several) large steps backwards and ask what do we need from a 21st century tax collecting authority and then look at what you've got now and go from there ... but that's never going to happen.

[Like a badger]

Re: Ho-Hum here we go again ... again ... again ... again ... ... ... ...

"Fundamentally take a (several) large steps backwards and ask what do we need from a 21st century tax collecting authority and then look at what you've got now and go from there ... but that's never going to happen."

Certainly won't because it wouldn't be possible to create a 21stC tax collection organisation when the tax regulations are so byzantine. Tax simplification has been talked about since forever, not a single government has ever attempted it. Even with idiotic taxes like employer's NI, stamp duty, inheritance tax, they won't touch other than to put up or make more complex.

A visit to the home page of the Office of Tax Simplification is quite revealing about government's commitment to simplifying the tax code.

[TDog]

Re: Ho-Hum here we go again ... again ... again ... again ... ... ... ...

It probably will in the 22nd century, and be considered as modern and upto date.

[snowpages]

Crazy suggestion

They could just simplify tax? Madness, I know.

[codejunky]

Re: Crazy suggestion

@snowpages

"They could just simplify tax? Madness, I know."

That would be the dream

[ChodeMonkey]

Re: Crazy suggestion

Madam, that would be a nightmare.

Without a complex set of tax rules we at the top would have to pay more tax due to a reduction in loopholes and carve-outs put in place for us! For shame!!!

[J.G.Harston]

Re: Crazy suggestion

I've been saying for years: DON'T TOUCH THE ONLINE SELF-ASSESSMENT SYSTEM! PLEASE!

It's clunky, but IT WORKS. Takes me less than five minutes to report my finances. Let some buzz-filled code monkey at it and they'll destroy it.

[midgepad]

Companies House

Has a page into which a limited company formed to keep the roof on a block of flats can type 4 n7 version a year.

But from next year it has to be an XML message produced by software from one of several companies.

Perhaps the roof can wait another year.

[johnB]

HMRC - efficiency

Ha ha ha ha ha.

Accenture / NIRS2 / shudder

[Diogenes8080]

OMG SAP

I hate to think how great a disaster that is going to be, even if the signatories on both sides are required to pledge their firstborn's souls never to change the specifications or deliverables.

But think of this: one legacy the HMRC is struggling to replace is a colossal pile of COBOLlers from the previous century. It's mentioned on The Reg somewhere. Yes, I am sure the maintenance cost has been significant but how much value has the HMRC obtained from that code? (Less the odd fiscal catastrophe caused by changes that system could not accommodate.)

How long will that SAP solution last before it requires rewriting? Will the HMRC do a DEFRA and eventually implement an ERP system running in an environment that is already deprecated?

[Dr Dan Holdsworth]

The problem is careers

Britain has the most complicated tax code in the developed world. As a result of this huge complexity, dodging tax has become a national pass time and thus a career path has developed. It goes like this:

Firstly, get a degree in something accountancy-related.

Secondly, get employed by HMRC and stay there until you have a fair grasp of how their systems work.

Thirdly, resign from HMRC and go to one of the tax-dodging accountants to help their clients dodge tax, using the expertise you acquired in HMRC.

Thus HMRC is always in the situation of having to train new people since the smarter end of their workforce is continually leaving for more money, leaving them with dregs and trainees.

[elsergiovolador]

Re: The problem is careers

If you are rich enough you'll get individual tax treatment anyway where you negotiate how much you are willing to pay.

[Anonymous Coward]

The REAL problem is no accountability ... keep failing and it impacts your career NOT AT ALL !!!

So so True !!!

So many stories of meetings at 'nice' restaurants to discuss the Tax situation with a rich company that has very good Accountants & Lawyers on tap.

Finally agreeing that paying 10% of the estimated tax bill is considered appropriate as it saves HMRC many years of 'debate' in the courts and many £Millions in costs if they lose !!!

I, of course, do this every year ... and my tax bill is substantially reduced ...... by a factor of 0% !!!

[Oh the problems of not being rich enough !!!]

:)

[Anonymous Coward]

Re: The REAL problem is no accountability ... keep failing and it impacts your career NOT AT ALL !!!

HMRC has a special unit specifically for high-net-worth individuals and corporations where individual rates outside of the normal system are negotiated.

[Anonymous Coward]

HMRC and the Dinosaurs of Data

My memory may be failing me, but don't some of the HMRC's omnishambles of critical 'legacy' systems still run on ICL, sorry Fujitsu VME?

I know VME now runs on Windows via some sort of emulator, and I've a vague memory that some genius in HMRC decided to run those Windows instances in AWS.

I mean, even without anything else, "What could possibly go wrong?"

Herding cats would be easier than taming HMRC's dinosaurs!

[Fruit and Nutcase]

Re: HMRC and the Dinosaurs of Data

Latest example of excellence in use of data

https://www.theguardian.com/society/2025/nov/09/hmrc-trial-child-benefit-crackdown

[codejunky]

Re: HMRC and the Dinosaurs of Data

@Fruit and Nutcase

"Latest example of excellence in use of data

https://www.theguardian.com/society/2025/nov/09/hmrc-trial-child-benefit-crackdown"

Watch this be the next excuse for digital ID. Well the next excuse could be its raining but the next one.

[J.G.Harston]

Hold on, they currently spend 1.1bn, they have been give 1.6bn and told to save 0.8bn? That means their spend going *UP* to 1.9bn! Is Sir Humphrey behind this?

[Apocalypso - a cheery end to the world]

I think that means HMRC estimated they needed 1.6 + 0.8 = 2.4 in total but were told they can't have that much. Instead they were given 1.6 and told to fund the rest through savings.

[jfollows]

Slowly getting slightly better

For what it’s worth, I was able to change my tax codes this year online and easily, whereas the last time I wanted to do this a couple of years ago I had to write to them three times - my first letter was ignored, they did totally the wrong thing after my second letter so the third was required to correct their mistakes. A huge waste of my time and theirs. This year I corrected their predictions for my income and the following day it was all in place as I wanted.

Small steps.