This is a case study for Principle Q3: Assured quality.
HMRC took an in-depth look at its approach to quality after it found a significant error in its Corporation Tax statistics. HMRC’s action in inviting an independent review of their data quality management approach is an example of best practice for other statistics producers.
Corporation Tax is levied on the taxable profits of companies and makes up about 9% of HMRC’s total tax receipts. HMRC’s Corporation Tax statistics provide annual data on receipts and liabilities, obtained from an administrative data source.
HMRC found an error in its published Corporation Tax receipts statistics in 2019, which led to substantial revisions across these statistics, affecting the period from April 2011 to July 2019. HMRC carried out a range of activities to assess this issue and identify mitigating actions to take to improve the quality of its statistics, including inviting the OSR to carry out a review of the principles and processes underpinning the quality of HMRC’s official statistics. OSR carried out a review of HMRC’s quality management approach and published its findings in April 2020.
The review primarily focused on source data quality and the importance of statistics producers understanding the nature and quality of the data they work with. The review report contained nine recommendations, which included producing process maps of end-to-end processes, developing Reproducible Analytical Pipelines, and reducing HMRC’s suite of publications.
The expectation is that these changes will improve the quality of HMRC’s statistics going forwards, for example by making sure analysts fully understand the data they are working with. All nine recommendations were welcomed by HMRC’s senior leaders, and a programme of work has been designed to implement the recommendations in 2021 to 2022 and beyond. This work has already increased HMRC’s level of assurance around the quality of its data and led to further improvements.
In asking OSR to carry out an independent review, HMRC showed a proactive and open approach to strengthening data quality. The review and HMRC’s response to it, emphasise the importance of having analytical leaders that transparently campaign for and support changes and innovations that can enhance the quality of statistics. This provides an example for other producers who might wish to inform their own assurances around the quality of the data or the statistics that they produce, through periodic or systematic, independent reviews.