Revenue and Customs: Annual Reports
The question
To ask the Chancellor of the Exchequer, what assessment he has made of the Comptroller and Auditor General’s qualified opinion on the regularity of HM Revenue and Customs’ 2024-25 Resource Accounts.
Answered by Treasury
HMRC devotes significant effort to addressing error and fraud. Its strategy focuses on preventing error and fraud from entering the system, promoting compliance, and responding to non-compliance.
Reforms to Research & Development (R&D) relief have more than halved error and fraud levels from 17.6% in 2021-22 to 6.4% in 2023-24, and recent investment in Child Benefit compliance activity of an additional 180 compliance officers over 5 years has already protected tens of millions of pounds and is expected to protect hundreds of millions more in the coming years.
The C&AG is currently considering increasing the current 1 percent materiality threshold at which it assesses the regularity of spending on R&D reliefs and Child Benefit to a level that more accurately reflects the reduction in the level of error and fraud that is attainable with a cost-effective control environment. This will be piloted for Child Benefit in 2026–27 and later extended to R&D reliefs. Full detail can be found here Annual Report and Accounts 2025 to 2026. R40 Part Two - Report by the Comptroller and Auditor General.
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