Improving the data HMRC collects – consultation

The government have launched a consultation to improve data in relation to employment and self employment.

The consultation

Proposes a number of options for improving the range of data HM Revenue and Customs (HMRC) collects, uses and responsibly and safely shares across government. They want to ensure that the data held gives an accurate and up to date picture of citizens and businesses to help build a modern tax administration system and improve government policy making.

This consultation plays an important role in delivering on these pledges by exploring how HMRC could collect additional data as part of the tax system, helping to make tax easier to get right and harder to get wrong, as well as better share data securely across government to improve policy making to provide better outcomes for citizens and businesses. We are committed to working with businesses and stakeholders to ensure that any additional burden is minimised, including options around how and when we collect any additional data.

Scope 

The consultation identifies six areas where HMRC’s data could be improved. These are:

• the business sector of the self-employed 
• the occupations of employees and the self-employed
• the location of an employment or a business
• the hours employees work 
• dividends paid to shareholders in owner managed businesses 
• the start and end dates of self-employment

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Employees are those whose earnings are subject to Pay As You Earn (PAYE) and those who are self-employed as someone who has trading income.

The consultation seeks views on these proposals before final decisions are made regarding which data to collect, from whom and from when.

As an example – Employee hours worked

One of the areas being explored is the requirement to report the hours worked.

It is suggested that ‘having a more detailed understanding of the hours that employees work would help with the analysis of labour market trends across government.?… increasing …. understanding of both voluntary part-time work and underemployment. While the structures used to remunerate work continue to diversify, holding information about the employed population (those whose earnings are subject to PAYE) provides the richest data given it covers the largest proportion of the population.’

‘In addition, the National Living Wage (NLW) and National Minimum Wage (NMW) are among the most important employment rights, and HMRC is currently responsible for enforcing them (though the Department for Businesses, Energy and Industrial Strategy has proposed consolidating NLW/NMW enforcement as part of a Single Enforcement Body for the labour market). HMRC already has information on the amount paid through RTI but does not currently have sufficient detail on employee hours to calculate an hourly rate.’

Who is this for

The changes will potentially affect all self-employed taxpayers, all employers, employees about whom additional data may be stored and shared, as well as tax agents and tax or payroll software providers.

The consultation is particularly interested in hearing from businesses with multiple branches, owner-managers of limited companies, and businesses who employ a significant number of staff through agencies or on irregular working patterns (as well as employment agencies themselves).

They are also interested in hearing from stakeholders with a wider interest in government data use and data strategy.

Consultation end point

This consultation will run until 12th October 2022.