Its summary shows total tax revenue has increased in each of the past five years, with HMRC raising raised £536.8bn in 2015-16. Last year, HMRC secured compliance yield of £26.6bn against a target of £26.3bn. Over the period 2005-06 to 2013-14, the tax gap as a percentage of liabilities decreased from 8.4% to 6.4%. 

The watchdog says it qualified HMRC’s resource accounts in 2015-16 due to material levels of error and fraud in personal tax credits.

NAO reports that HMRC has begun to shift the balance of its work, placing increasing emphasis on measures to prevent non-compliance rather than relying so much on investigating it afterwards.

On the topic of customer service, NAO highlights ongoing concerns about serious deterioration over the year. HMRC had maintained or improved customer service until the end of 2013-14, but then released staff before it had made all the changes needed to reduce demand.

As a result, HMRC saw the quality of its service to personal taxpayers fall in 2014-15 and the first half of 2015-16. HMRC restored customer service performance in the second half of 2015–16 to previous levels and has maintained this improvement into 2016-17.

Staff numbers were down from 66,900 in April 2011 to 58,600 in March 2016. The number of offices fell to 167 compared to 539 in 2005, and NAO highlights plans to reduce these further with the move into 13 regional centres over the next five years.

Looking ahead, NAO cites HMRC’s aim of providing personalised online services for taxpayers and automate the processing of tax information where possible, and notes the department plans to invest £1.8bn in transformation over the next four years.

The summary says HMRC expects the level of risk around its workforce planning to remain high in 2016-17, due to the size and complexity of the organisation and the demographics of its workforce.

HMRC Departmental Overview 2015-16 is here.