HM Revenue & Customs chief executive Lin Homer has apologised for calculation errors which meant HMRC overstated how much it recouped in owed tax.
Last week, a report from the National Audit Office revealed HMRC had overestimated the amount of tax it had collected by £1.9bn a year.
HMRC had agreed with the Treasury to claw back £2bn a year in extra tax in 2011/12 and 2012/13. But the NAO’s report pointed out the baseline against which this was measured was set £1.9bn below where it should have been.
HMRC was handed £1bn by the Treasury to carry out the project.
Giving evidence to the Treasury select committee this morning, Homer said: “The reason we haven’t found [the error] before is the estimated baseline was in a sense a point to negotiate the stretch to ask of HMRC in return for the £1bn investment.
“Since then we and the NAO have been measuring what we have actually done year-on-year rather than returning to that baseline. Obviously I am very sorry that error occurred.”
Homer said the department still hit its target of claiming an extra £2bn in tax over the two financial years in question.
She said: “I would want to emphasise the achievement our staff have made over those years has been what the Government asked of it, indeed slightly more. To their credit when the target was reached…they didn’t stop, they kept going. That is why no money has been lost to the country.”