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A multimillion-pound HMRC initiative raised more than £4 billion of extra tax over five years but failed to raise the department’s productivity to the predicted level, according to a report from the National Audit Office (NAO).
The new document shows that the Compliance and Enforcement Programme (CEP), made up of over 40 projects aimed at increasing efficiency in a range of areas, improved the way in which the Revenue tackles tax evasion and generated £4.32 billion in additional yield between 2006 and 2011, only slightly less than the anticipated £4.56 billion.
The initiative also generated an improvement in HMRC productivity – defined as the level of yield generated by each full-time-equivalent worker – of around 36%, as opposed to the 42% earmarked by department bosses, and is expected to bring in an additional £8.87 billion between 2011/12 and 2014/15, resulting in a total haul of £13.19 billion.
The NAO report lauds CEP for having introduced the use of IT to identify more effectively incidences of evasion – but the full potential of the new systems are not yet being exploited by the Revenue.
There is also criticism for the department’s failure to routinely measure the impact of CEP on taxpayers’ experience, for not systematically identifying how all projects contributed to yield increases, and for over-optimism of forecasts that, along with changes to scope and slippage in delivering projects on time, meant not all targets were met.
By 2012, CEP will have cost £387 million, as well as the jobs of 3,374 full-time-equivalent members of staff, all of whom had been removed from the taxman’s employ by the end of 2008/09, two years ahead of schedule.
NAO head Amyas Morse said the programme had ‘introduced ways of working that will strengthen HMRC’s compliance work in future’ but he added that the department could ‘achieve better value for money from its investment in compliance work by improved understanding of the impact of individual projects and ensuring that its staff has the capacity to exploit new systems to the full.’
