Transparency data

HM Revenue and Customs and Valuation Office Agency gender pay gap report 2019

Published 23 January 2020

Introduction

As HMRC’s Gender Champion and Chief People Officer, I am pleased to publish our gender pay gap report.

This year our gender pay gaps have improved a little which is positive news for an organisation of our size. Our insight indicates this is as a result of an increase of women in higher grades through promotion and external recruitment.

We are placing employee experience at the heart of everything we do to help us create and support an engaged, inclusive, and empowered workforce through the work to develop and embed the HMRC People Strategy. This will help us meet the Civil Service ambition to become the UK’s most inclusive employer by 2020.

To achieve this, we recognise more transparency and better analysis and insight, are critical to tackling any inequality in our gender pay gaps.

To support our progress, we have continued our analysis to identify factors that are driving our gender pay gaps. We continue to offer excellent flexible working arrangements, with the option to work part-time being open to everyone in HMRC regardless of grade, profession, gender or any other factor.

We offer mentoring and coaching opportunities to all our people, as well as leadership skills training, to develop the capability they need to succeed. Our talent and development programmes include opportunities for colleagues in junior and first line management roles. We offer learning suitable for part-time colleagues or for those who may find travelling to training venues difficult for whatever reason. We do this by using technology to support a flexible approach. We are ranked in the Business in the Community Top 50 employers for both Women and for Race. In addition, we have recently won a UK Social Mobility Award for our talent programmes.

We continue to embed and develop our approach to personal development through continuous career conversations for all our people. A key objective of this approach is to ensure individual development is inclusive for all those with flexible working patterns or caring responsibilities and offer learning around life events, supporting everyone to continue developing their skills and knowledge.

We continue to raise awareness of the benefits to people and the business from job-sharing and part-time working, and to highlight the importance of our managers’ roles in understanding individual needs, considering work-life balance and caring responsibilities, whatever an individual’s gender or gender identity. Our Smarter Ways of Working Programme is leading pilots which evidence how we can adopt remote and flexible ways of working which deliver for our business while supporting our colleagues with better work-life balance.

Increasing the number of Senior Civil Service (SCS) roles outside of London and developing regional career opportunities, alongside improved technology, means people can see opportunities to progress without having to consider extensive travel that may impact on caring responsibilities.

I want us to have a work environment where we can talk openly about things that impact on our everyday lives, such as the menopause. We’ve made good progress in this area and we will continue to promote this approach. I strongly support the work we do to implement workplace adjustments to enable everyone to fully participate in work. We have made significant progress on how we promote good mental health and support those with poor mental health. We are also focused on increasing understanding around stress prevention and the need for early intervention.

In publishing our gender pay gap data we will also look at ways to improve opportunities and pay to ensure equity amongst all our people. Pay is an important issue for many, not exclusive to gender, and we are engaging with our people and trade unions on how we can reform our pay system to be fairer to everyone.

Esther Wallington Chief People Officer, HM Revenue and Customs

Overview

In 2017, the government introduced legislation that made it a statutory requirement for organisations with 250 or more employees to report annually on their gender pay gap. Government departments are covered by the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017, which came into force on 31 March 2017. These regulations underpin the Public Sector Equality Duty and require relevant organisations to publish their gender pay gap by 30 March annually. This includes:

• the mean and median gender pay gaps in hourly pay
• the mean and median gender bonus pay gaps
• the proportion of male and female relevant employees who received bonuses
• the proportion of male and female full-pay relevant employees in each pay quartile

The gender pay gap is a measure of the difference between men’s and women’s average earnings across an organisation or the labour market. It is expressed as a percentage of men’s earnings. If a workforce has a particularly high gender pay gap, this can indicate there may be a number of issues to deal with, and the individual calculations may help to identify what those issues are.

The gender pay gap is different to ‘equal pay’. Equal pay legislation deals with unlawful pay differences between men and women who do equal work, i.e. they carry out the same jobs, similar jobs or work of equal value. Contractors who are on HMRC’s payroll and provide a personal service to HMRC are included where we have data about their gender. Under the Equality Act 2010 (2017 Regulations, schedule 1, paragraph 2(3), we are not required to include data relating to a relevant employee if the employee is under a contract personally to do work and, the public authority does not have, and it is not reasonably practicable to obtain, the data.

HMRC supports the fair treatment and reward of all our people irrespective of gender through our values of:

• being professional
• acting with integrity
• showing respect
• being innovative

This report gives the gender pay gap data in HMRC as at 31 March 2019, and covers 68,562 employees as defined by Regulation 2(1) of the Equality Act 2019 (Specific Duties and Public Authorities) Regulations 2017, which includes data for 166 contractors.

Our calculations followed the legislative requirements, and we confirm the data reported is accurate.

Gender pay gaps summary

This is the pay gaps data:

• mean gender pay gap - ordinary pay: 7.6%
• media gender pay gap - ordinary pay: 9.6%
• mean gender pay gap - bonus pay in the 12 months ending 31 March: 3.6%
• median gender pay gap - bonus pay in the 12 months ending 31 March: 6.3%
• the proportion of female employees paid a bonus in the 12 months ending 31 March: 62.0%
• the proportion of male employees paid a bonus in the 12 months ending 31 March: 62.6%

Organisation structure and pay

HMRC and VOA use the standard Civil Service grading system ranging from Administrative Assistant (AA) to SCS, plus a training grade covering our tax programmes.

Since 2018, HMRC and VOA have reduced their workforce by 898, with the largest decreases in our AA and Administrative Officer (AO) grades.

Women continue to be over-represented in more junior grades, where pay is lower, and under-represented in more senior grades.

HMRC and VOA data as at 31 March 2019 showing relevant employees

Grade (increasing seniority)	Number of men (percentage of men who work in this grade)	Number of women (percentage of women who work in this grade)	Female (percentage)
AA/ AO	9,564 (30.6%)	15,332 (41.1%)	61.6%
Officer (O)	7,256 (23.2%)	9,205 (24.7%)	55.9%
Higher Officer (HO)/ Senior Officer (SO)	9,924 (31.7%)	9,433 (25.3%)	48.7%
Band T (Training)	446 (1.4%)	299 (0.8%)	40.1%
Grade 7 and Grade 6	3,755 (12.0%)	2,783 (7.5%)	42.6%
SCS	214 (0.7%)	185 (0.5%)	46.4%
Contractor (non-grade equivalent)	122 (0.4%)	44 (0.1%)	26.5%
Total	31,281	37,281	54.4%

Delegated grades - AA to Grade 6

As a Civil Service department, HMRC and VOA is governed by public sector pay policy as set out in the Civil Service Pay Guidance for delegated grades. SCS is covered by separate SCS pay guidance published by government.

The pay guidance defines the overall financial parameters for Civil Service pay awards each year to ensure that these pay awards are consistent with the government’s overall objectives.

The AA grade consists of a single spot rate of pay, whereas grades AO to Grade 6 each have basic pay ranges consisting of a minimum and maximum rate of basic pay. There are no target rates, steps or progression points within the pay ranges. Upward movement within the pay ranges is via annual pay awards.

To cover our geographical offices across the UK, each grade has 2 pay ranges, ie London and national.

HMRC’s settlement date for annual pay awards is 1 June, and for 2019 comprised of 2 main elements:

• a consolidated award paid to all our people, irrespective of gender
• a non-consolidated, non-pensionable award linked to exceptional performance against objectives, which we paid for the final time on 1 June 2018

Dependant on the nature of the work undertaken in certain roles, additional allowances or supplements may also be paid, which together with basic pay forms the annual salary.

The value of the pay awards is negotiated with our 2 recognised trade unions.

Senior Civil Service

Pay and grading for the SCS across the Civil Service are governed by the Cabinet Office.

The SCS structure consists of 3 grades:

• Deputy Director (SCS1)
• Director (SCS2)
• Directors General (SCS3)

Each grade has a set pay range with a minimum and maximum rate of basic pay. There are no target rates, steps or progression points within the pay ranges. Upward movement within the pay ranges is via annual pay awards.

The settlement date for annual pay awards is 1 April, and for 2019 comprised of 3 main elements:

• a consolidated award paid to all our people in the SCS
• a non-consolidated, non-pensionable award linked to exceptional (moderated) performance against objectives for the performance year 2018 to 2019
• a non-consolidated, non-pensionable award linked to short-term exceptional performance during the year

The parameters for SCS pay in HMRC are governed by the Cabinet Office and managed by HMRC’s executive committee.

Gender pay gaps data

Gender composition

Image showing gender balance: 54% are women at 37,281, down 2.8% in 2018. Men are 45.6% at 31,281, up 0.5% from 2018.

2019 Gender pay gaps in hourly pay

Mean pay gap

Image showing mean hourly rates for females of £13.64 and men of £14.76, a gap of 7.6%, a 0.9% reduction from 2018.

Median pay gap

Image showing median hourly rate for females is £12.18 and £13.47 for males, a gap of 9.6%, a 3.9% reduction from 2018.

HMRC and VOA’s gender pay gaps in hourly pay have reduced favourably this year. We believe this is due to more females having been promoted or recruited to higher grades.

Compared to 2018, there was an increase of 4.3% female colleagues in HO grade, 7.3% increase of female colleagues in the SO Grade, 8.8% increase of female colleagues in Grade 7 and 5.6% increase in Grade 6.

There was a 9.9% decrease of female colleagues in the AO grade.

The combination of the distribution and pay for our workforce continues to drive our mean and median figures and whilst we have a very diverse workforce, a large number of our female workforce remain in the lower pay grades.

Pay elements used in the calculation include allowances, whereas voluntary salary sacrifice for childcare vouchers and cycle to work schemes are excluded.

There are 653 entries which were excluded from hourly pay calculations as they were not a ‘full pay relevant employee’ for all of March 2019. This is because they were either not being paid or were on reduced, statutory or nil pay at any point during March.

Proportion of males and females by pay quartiles

This table shows the proportion of male and female full-time relevant employees in each pay quartile.

Quartile	Female (%)	Male (%)
First (upper) quartile	55.4	44.6
Second quartile	59.6	40.4
Third quartile	54.8	45.2
Fourth quartile	46.9	53.1

The data shows that the proportion of women paid within each quartile is not consistent with the overall gender composition within HMRC and VOA. In particular, just 46.9% of the upper quartile are women, whereas overall women represent 54.4% of HMRC and VOA.

Bonus pay gap data

Mean bonus gap

Image showing that the mean bonus pay gap is 3.6%, down by 1.5% from 2018.

Median bonus gap

Image showing that the median bonus pay gap is 6.3%, a 22.9% increase from 2018.

For bonus pay we captured data for the 12 month period between 1 April 2018 and 31 March 2019 from our in-year and end-year reward schemes.

HMRC’s and VOA’s bonus gaps have reduced favourably this year as 62.6% of men and 62.0% of women received a bonus. This is an increase from 2018 whereby 59.2% of men and 59.2% of females received a bonus.

We believe this is due to our much improved in-year reward system for HMRC. The system allows individuals to be rewarded for exceptional performance in real-time whereas the previous system, which was phased out in June 2018, looked at performance. VOA have reduced the number of levels of awards and are introducing a bi-annual assurance panel to analyse the distribution of non-consolidated payments in year.

Image showing that 62% of female colleagues received a bonus in 2019, up by 2.9% from 2018, compared with 62.6% of male colleagues, up by 3.4%.

Our bonus systems are all gender neutral by design. However, the larger female workforce in the lower pay grades drives our mean gender bonus pay gap, in the same way that it drives our mean gender hourly pay gap.

At HMRC and VOA we are proud to enable our people to work alternative working patterns including reduced hours if it suits their lifestyle. However, this does not impact upon the bonus pay gaps, as year-end bonuses are pro-rated for people who work part-time.

The median gender bonus pay gap is 6.3% (and was -16.7% in 2018), which for HMRC is due to the large number of ‘Simply Thanks’ vouchers that were issued during the year (‘Simply Thanks’ made up 68% of all bonuses for HMRC).

Progress since the 2018 report

Performance management

Following a review of our performance management system we introduced a fundamentally new approach called Performance and Development Conversations (P&DCs) in July 2018 for our people in grades AA to Grade 6.

The new approach aims to encourage, support and improve the quality of conversations between managers and their people that focus on the how of performance, as well as development, progress, aspirations and wellbeing.

More positively, there are no overall performance ratings, which removes perceptions of bias and increases opportunities for development, engagement and productivity.

Reward and recognition

To support our new P&DC approach, we trialled a number of in-year reward schemes within business areas in 2017 to 2018. In June 2018, we phased out the year-end performance awards and improved our in-year reward schemes. In particular, we set upper limits by grade for the High Performance Award, and the short-term Recognition Award has 3 fixed rates, which means that the award is received in full by people who work part-time.

Equal pay audit

HMRC conducts an equal pay audit every 3 years. The 2019 report is due to be published in 2020.

Talent and development programmes

We recognise that our people don’t all want the same things from their careers, however, we aim to provide everyone with opportunities to be the best they can be and to progress, whether to more senior roles, or other roles in HMRC or the Civil Service.

To support this, accessibility of our offer is at the heart of our thinking around our talent and development programmes. Internally, we are reviewing our Spring, Leap and Ascend programmes to develop a more regionally based offer rather than single location residential event.

We have made good progress over the last year in providing a regional offer, and now deliver all of our internal Accelerated Development Programmes (Spring, Leap, Ascend and Embrace) on a regional basis – Spring in 5 regions, Leap in 3, Embrace in 4 and Ascend in 2 (the number of regions depends upon the cohort sizes and viability). We are picking up a good spread of candidates from across the country.

Across government we are working with Civil Service Talent in the Cabinet Office to increase the regional offer for the centrally-run Civil Service-wide Future Leaders Scheme and Senior Leaders Scheme programmes and we are also joining up with other government departments to explore additional opportunities to create cross departmental networks outside London.

Through this work our aim is to provide an offer that is accessible to all our people and that recognises the challenge for colleagues with caring responsibilities to otherwise participate.

Flexible working

As part of our HMRC Transformation Programme, and moves to regional centres, we will continue to support people who wish to work more flexibly, across all grades, particularly in the senior grades where the representation of women is lower. Most roles are available as job-share, reduced hours, or flexible working patterns.

Smarter working

To further support our Transformation Programme, we are encouraging our people to consider different ways of working where appropriate, such as varying their start and finish times or working remotely, including from home. We believe that this will help them to better manage their wellbeing, caring responsibilities and work-life balance and this has been evidenced through our smart working pilots.

We have also invested significantly in more mobile technology and are combining this with looking more closely at our working practices to give all colleagues more choice and a better experience in how, where and when they work.

Wellbeing

Following the delivery of ‘Wellbeing Confident Leaders’ training to our SCS, we are supporting our leaders to embed wellbeing considerations into their planning, decision-making and change management. We continue to raise awareness of work-life balance and caring responsibilities, regardless of sex.

Through the health and wellbeing campaigns we support, we remind colleagues of all the wellbeing support and services which are available to everyone.

We continue to work towards creating a culture where colleagues and managers feel confident to talk openly about health concerns and we have embedded this into our performance management approach, encouraging regular conversations about personal wellbeing and establishing what support may be needed.

Data from our annual survey (Civil Service People Survey; December 2018) shows a very small difference in the flourishing at work scores (PERMA index), with female colleagues reporting a score of 72%, 3% higher than male colleagues. Working closely with our colleague-led gender network gives us valuable insights to enable targeted wellbeing activity to maximise positive impacts for both sexes.

SCS locations

We are actively increasing the number of SCS roles outside of London, and therefore developing career opportunities across the regions. We currently have 4 SCS roles filled by job-share (3 at SCS 1 level and one at SCS 2 level) and this is always considered as part of our vacancy planning process at SCS.

Specific actions

Contractors data

Of the 461 contractors in HMRC at 31 March 2019, we were able to capture gender for only 166 people. We will look to put in place a more robust system to help us identify the gender of all contractors for future reporting.

In compiling the information, a public authority is not required to include data relating to a relevant employee if the employee is under a contract personally to do work, and the public authority does not have, and it is not reasonably practicable for the public authority to obtain, the data (2017 Regulations, schedule 1, paragraph 2(3).