Stats watchdog to probe HMRC’s £7bn tax data gaffe

Written by Jim Dunton on 11 November 2019 in News

Office for Statistics Regulation will – at HMRC’s behest – examine error that saw tax contributions double-counted

Credit: eFile989/CC BY-SA 2.0

The Office for Statistics Regulation has confirmed it is to review the quality-assurance principles and processes HM Revenue and Customs uses for its data publication after a double-counting error added almost £7bn to its Corporation Tax receipt statistics.

Director general for regulation Ed Humpherson said HMRC had invited the watchdog to give an independent assessment of the department’s quality-management approach and identify areas of improvement after the “significant error” emerged earlier this year.

While the error – revealed by HMRC in September – has not resulted in any financial loss to the nation's coffers, it did mean that Corporation Tax receipts statistics reflected a figure that grew to become a combined £6.95bn higher than should have been the case between April 2011 and July 2019.

Humpherson said HMRC’s most recent set of Corporation Tax statistics, published in September, had corrected the data and noted that the actual figures reported in HMRC’s accounts remained the same.

Related content

“We know that HMRC very much regrets this error, and we are pleased to help you take a proactive approach to improving quality management processes across your statistics,” he wrote in a letter to HMRC chief statistician Sean Whellams this week.

 “We intend that our final recommendations will be forward looking and focus on improvements HMRC can make to help avoid issues in the future.

“The review will consider: existing quality assurance (QA) processes and current improvement plans within the Knowledge, Analysis and Intelligence (KAI) directorate of HMRC; how QA of official statistics works in practice within KAI; the processes in place for handling errors and managing risk during statistical production; and the levels of risk of different sources of error in KAI’s statistical production processes.”

In a letter to Public Accounts Committee chair Meg Hillier in September, then-HMRC second permanent secretary Jim Harra said Corporation Tax statistics needed to take account of Corporation Tax Credits – which are reliefs designed to encourage various activities.

Harra, who is now the department’s perm sec, said the credits either reduced a company’s liability to corporation tax or made a payment to the firm and that the value of the credits was added to the payments received.

“Quality assurance checks have identified some double counting of credit values when using internal financial data in the statistical production process,” he said.

“The scale of the revisions varies between years. The revised Corporation Tax receipts figures published today are £650m lower in 2011-12, £2.3bn lower in 2017-18, and £4bn lower in 2018-19.”

Harra insisted it remained the case that onshore Corporation Tax receipts, including the Bank Surcharge, had risen significantly in recent years “with growth of 50% between 2011-12 and 2018-19”.

However, he accepted that the revisions affected the Office for National Statistics’ estimate of Public Sector Net Borrowing, which draws on the gross Corporation Tax receipts statistics.

HMRC spokesperson said the department very much regretted the statistical error and reiterated that it did not affect the amount of tax paid by companies and received by HMRC.

“A review has been launched into the analytical and quality assurance processes used to generate HMRC’s published statistics,” they said.

The latest Corporation Tax statistics from HMRC detail £55.1bn worth of receipts in 2018-19.


About the author

This article originally appeared on Civil Service World

Share this page




Please login to post a comment or register for a free account.

Related Articles

DWP faces ‘significant increase’ in fraud and error, watchdog warns
16 October 2020

NAO report reveals that, following heavy coronavirus-related recruitment, departmental staffing levels may return to 2013 levels

UK pins 'cynical and reckless' Olympic cyberattacks on Russia
20 October 2020

Government attributes 2018 campaign to Moscow and claims more assaults were planned for cancelled 2020 summer games

Related Sponsored Articles

Workspace, Not Workplace: How Agile Working Increases Productivity whilst Driving Engagement and Fostering Inclusivity
12 October 2020

2020 has been a year of unprecedented change for the UK public sector. Today’s agile working technology enables you to meet citizen needs in this challenging operating environment by empower your...

Intelligent Spend Management in the Public Sector
24 September 2020

SAP Concur says it's time for the public sector to embrace more efficient invoice management technology

IT Resilience: The Key to a Successful Digital Transformation
22 September 2020

Steve Blow, tech evangelist at Zerto, explains why digital transformation efforts could be futile if local authorities don’t address and improve their IT resilience 

Reimagining Employee Engagement
13 October 2020

Studies have shown that an engaged employee is happier, more productive, and more committed to their job. So how can we encourage employee engagement? Trickle suggests innovative solutions ...