Corporate report

HMRC and Valuation Office Agency gender pay report 2021

Published 27 January 2022

Introduction

As HMRC’s Gender Champion and Chief People Officer, I am pleased to publish our 2021 gender pay gap report.

I am delighted that we have improved on our mean gender pay gap: the overall mean gender pay gap has reduced by 1.4% from last year’s figures, and 4.2% overall over the last 2 years. However, there is much more to do. Our median gender pay gap has increased over the last year by 2.5%, although over the last 2 years it has reduced from 9.6% to 7.9%.

The workforce distribution continues to impact on our gender pay gaps. Women are over-represented in our lowest paid grades despite a slight decrease from 2020. There is a slight increase in women within our tax specialist programmes and more senior grades.

Creating a more gender balanced workforce takes time and it also takes a holistic approach. We will continue our efforts to embed equality, diversity and inclusion (EDI) into every policy and process; to raise awareness of flexible and part-time working for all genders; to encourage career development; and to ensure our colleagues have the right support and guidance to make gender inclusive decisions.

I am committed to deepening our understanding of why we have any gender pay gaps. We have started work with our customer groups to dive deeper into the workforce data for their areas, to ensure we can better target activities. It is vital however that along with targeted interventions we take action to create an inclusive environment, through the language and imagery we use, the issues we choose to highlight and the conversations we encourage.

The specific actions we are taking as a result of this gender pay gap report and our wider activity, collectively reflect our broader approach to making HMRC and VOA a great place to work, and one where we celebrate and champion gender equality.

Esther Wallington, Chief People Officer, HMRC

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, and bonus pay
• the proportion of male and female employees who received bonuses
• the proportion of male and female full-pay employees in each pay quartile

The gender pay gap measures the difference between the average earnings of men and women across an organisation of the labour market. It is expressed as a percentage of earnings for men.

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. That means they carry out the same jobs, similar jobs, or work of equal value.

We have not included contractors who are on HMRC’s payroll and provide a personal service. 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.

This report gives the gender pay gap data in HMRC and VOA as at 31 March 2021, and covers 67,115 employees as defined by Regulation 2(1) of the Equality Act 2019 (Specific Duties and Public Authorities) Regulations 2017.

Our calculations followed the legislative requirements, and we confirm the data reported is accurate. Our report is also in line with the recommendations made from the Inclusive Data Taskforce report published in September 2021.

Organisation structure and pay

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

Since 2020, HMRC and VOA has reduced its workforce by 1,143, with the largest decreases in our AA and Administrative Officer (AO) grades. Overall, the number of women has reduced by 1,202 and the number of men has increased by 59.

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

Table 1: HMRC and VOA Data as at 31 March 2021 showing relevant employees

Grade (increasing seniority)	Number of men (% of men who work in this grade)	Number of women (% of women who work in this grade)	% Women
AA/AO	8,790 (27.8%)	12,811 (36.0%)	59.3%
EO	7,272 (23.0%)	8,367 (23.5%)	53.5%
HO/SO	10,441 (33.0%)	9,958 (28.0%)	48.8%
Band T	352 (1.1%)	293 (0.8%)	45.4%
Grade 7/6	4,314 (13.7%)	3,382 (9.5%)	43.9%
SCS	265 (0.8%)	240 (0.7%)	47.5%
Non-grade	129	501
Total	31,563	35,552	53.0%

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. The Senior Civil Service is covered by separate SCS pay guidance published by government.

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 United Kingdom, each grade has 2 pay ranges, London and national.

HMRC’s settlement date for annual pay awards is 1 June. In February 2021, HMRC trade union members voted to accept a 3-year pay and contract reform offer, with the first pay awarding covering 1 June 2020 to 31 May 2021 for HMRC colleagues at AA to Grade 6.

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

Senior Civil Service

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

There are 3 grades, each with a set pay range: Deputy Director (SCS1), Director (SCS2) and Directors General (SCS3).

Gender pay gaps data

Gender composition

Image showing that females make up 53.0% of the workforce at 35, 552, down by 0.8% from 2020, and males make up 47.0% at 31, 563, up by 0.8%.

2021 Gender pay gaps in hourly pay

Mean pay gap

Image showing the mean hourly rate is £15.04 for females and £15.56 for males, a gap of 3.4%. This is a reduction of 1.4% from 2020.

Median pay gap

Image showing the median hourly rate is £13.37 for females and £14.51 for males, a gap of 7.9%. This is an increase of 2.5% from 2020.

HMRC and VOA’s mean gender pay gap in hourly pay has reduced this year. A major factor would be more women having been promoted or recruited to higher grades.

The median gender pay gap however has increased by 2.5% from 2020.

The median gap is influenced by the higher proportion of women compared to men in the lower grades at AA and AO. This means a drop in the median salary for women when compared with the median for men.

Compared to 2020, there was an increase of 8.0% women in the Senior Officer (SO) grade, a 10.3% increase of women in Grade 7 and a 19.3% increase in Grade 6.

There was a 17.2% decrease of women in the AA grade and a 12.0% decrease of women 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. Voluntary salary sacrifice for childcare vouchers and cycle to work schemes are excluded.

Proportion of men and women by pay quartiles

Table 2 shows the proportion of full-time female and male relevant employees in each pay quartile.

The pay quartiles are created by ranking each full-time employee in order from lowest earning (first quartile) to highest earning (fourth quartile).

The pay quartiles broadly reflect the uneven distribution of women through the grades in HMRC and VOA, meaning that proportionally more women than men are in lower paid grades.

We will look further into the data and roles that are represented in these quartiles, to identify any justifiable disparities and develop actions accordingly (action 3 in the specific actions section).

Table 2: pay quartiles

Pay quartile	Female	Male
First (lower) quartile	51.6	48.4
Second quartile	55.7	44.3
Third quartile	50.4	49.6
Fourth (upper) quartile	46.5	53.5

Bonus pay gap data

2021 bonus pay gaps

Mean bonus gap

Image showing the mean bonus pay gap between males and females is -0.1%, a reduction of 0.7% from 2020.

Median bonus gap

Image showing the median bonus pay gap percentage between males and females is 0%, the same as 2020.

For bonus pay we captured data for the 12-month period between 1 April 2020 and 31 March 2021 from our in-year and end-year reward schemes.

HMRC and VOA’s bonus gaps have decreased this year as 63.3% of men and 62.3% of women received a bonus. In 2020, 62.4% of men and 61.3% of women received a bonus. HMRC’s in-year reward system for HMRC allows individuals to be rewarded for exceptional performance in real-time and VOA has reduced the number of levels of awards.

Image showing 62.3% of females and 63.3% of males received a bonus in 2021. This was up by 1.0% for females and up by 0.9% for males from 2020.

Our bonus systems are all gender neutral by design. However, the larger female workforce in the lower pay grades creates our mean gender bonus pay gap, in the same way that it creates our mean gender hourly pay gap. At HMRC and VOA we are proud to offer our people alternative working patterns, including reduced hours if it suits their lifestyle. However, this does not affect the bonus pay gaps, as year-end bonuses are pro-rated for people working part-time.

The median gender bonus pay gap remains unchanged from 2020 at 0%, which for HMRC is due to the large number of Simply Thanks vouchers that were issued during the year (Simply Thanks made up 60% of all bonuses for HMRC and are worth £20).

In 2020 women in VOA received more bonus cash proportionately than men. It is the first time VOA has shown a significant gender disparity within its bonus scheme. Women seem to have received a significantly higher proportion of the higher awards (£300) towards the end of the VOA’s former bonus award scheme.

The VOA bonus award scheme has since been replaced with vouchers which are largely based on 1 lower cash level of £20. The new vouchers will be more widely and frequently distributed and we do not expect this disparity to be repeated.

The 2020 to 2021 performance year represents the fifth year of our fully in-year cash bonus scheme. As part of a multi-year, flexible case pay deal commencing in August 2019, we converted a proportion of the bonus pay pot into consolidated pay. This allowed us to maximise progression and address recruitment and retention issues. This year we have replaced the previous bonus award scheme with a scheme based on smaller value awards using vouchers. We are continuing to monitor the gender impact of this new scheme.

Progress since the 2020 report

Flexible working

We continue to support people who wish to work more flexibly across all grades, particularly where representation of women is lower. As part of pay and contract reform, we’ve introduced a new flexibility framework to enable more colleagues to have the flexibility they need to manage their working and personal lives.

Smarter working

HMRC was well prepared for COVID-19 as we had already invested significantly in mobile technology. Our regional centres had a range of flexible workspaces and we had launched our Smarter Ways of Working standards to provide our colleagues with more choice and autonomy over where and how they work.

We have learnt a huge amount from our COVID-19 experience, what works well at home and what is better suited to an office. We have committed to remaining an office based organisation for the value that brings, and also provided flexibility through our changes to pay and contract reform which gives colleagues the opportunity to work from home.

As we begin to transition to this mix of home and office working often referred to as hybrid, we have launched a set of Where and How We Work principles. These support the range of flexible options we have in our organisation including varying start and finish times as well as working remotely, including from home, to help support wellbeing, caring responsibilities and work-life balance.

Wellbeing

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 raise awareness of work-life balance and caring responsibilities, regardless of sex. Working with our provider for our Employee Assistance Programme, we have introduced 2 workshops on men’s health and women’s health, to build awareness of common gender associated health issues and offer advice on how to look after your body and mind.

We continue to work towards creating a culture where colleagues and managers feel confident to talk openly about health concerns. 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 2020) shows a very small difference between the sexes in the ‘flourishing at work’ scores (PERMA index), with women reporting a score of 73%, 2% higher than men. Working closely with our colleague-led gender network, gives us valuable insights to enable targeted wellbeing activity to maximise positive effects for both sexes.

With even greater emphasis on colleague wellbeing this year during the COVID-19 pandemic, we have provided additional support and advice, created new wellbeing products, and further championed the services available to all.

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 5 SCS roles filled by job-share (4 at SCS 1 level and the other at SCS 3 level) and this is always considered as part of our vacancy planning process at SCS. There are 7 women and 2 men – all job share roles involve at least 1 woman (no job share role is totally covered by men)

Specific actions

Specific actions for HMRC

1.We will profile and encourage flexible and part-time working for men and women in our communication campaigns, to build a more inclusive workplace.

We have introduced standard wording into all Expressions of Interest. This highlights the range of flexible working patterns and support available and encourages all job applicants to discuss alternative working patterns with the vacancy holder following the selection process. We have asked the Government Recruitment Service to include wording in all adverts. We also highlight our maternity, paternity, adoption and parental leave provision in all job adverts.

We are seeing some improvement for females at each stage of the recruitment cycle and will work more closely with customer groups to break their data down by grade and job role, to better target interventions.

2.We will ensure gender equality is actively considered as part of our policy improvements, particularly in our review of how Performance and Development Conversations (PDCs) are operating across HMRC and in ensuring gender parity throughout recruitment and selection processes.

Equality, diversity and inclusion are central features of policy development and as part of our process we consider our approach to evaluation, to ensure we are achieving outcomes as intended.

For example, we are committed to supporting colleagues of all genders who are becoming parents. Our new policy is gender neutral and more inclusive, using the terms New Parent Leave (and Primary and Supporting Parent), to ensure we concentrate on the role the new parent will play caring for their child and the support they need.

Our policy includes greater equity to entitlements for antenatal appointments and classes, pre-adoption and pre-surrogacy appointments, where all colleagues are entitled to reasonable paid time off to attend where needed. We have also introduced the entitlement to access special leave to support all colleagues who may be undergoing fertility treatment, regardless of gender, including partners, where appropriate.

We have extended flexible working hours to colleagues up to Grade 6 which supports them to balance work and personal commitments, and increased our supporting parent (paternity or equivalent) leave from 2 to 4 weeks. There are also non-contractual commitments like the opportunity to work from home for 2 days or more per week which embeds hybrid working arrangements into our ways of working.

We will be reviewing our recruitment policy in the coming year, and our PDC process, ensuring gender equality is considered as part of this. For all policy transformations we do an equality impact assessment.

3.We will work with and support regional centre leads and customer groups to take an evidence-based approach to identifying and addressing any gender imbalances in their areas.

We have developed and internally published quarterly data packs by region and by customer group. We’ll continue to do this and are working with customer group EDI leads to develop more local actions based on their data.

As part of our activity to delve deeper into the drivers for our gender pay gaps and to target our interventions more effectively, we have begun work with one of our largest customer groups. This will involve analysing their workforce distribution and representation data, as well as their recruitment data, to develop interventions accordingly. When we understand what works, we can roll that out to other groups.

4.We will evaluate the effectiveness of our talent development activities and target interventions to identify, understand and address points in the pipeline where the proportion of women decreases.

We have undertaken an analysis of our talent development programmes from 2012 to 2020. Our figures show there is general gender parity in acceptance rates across all programmes, covering grades AA to Grade 6, with some variation in promotion rates depending on programme.

Across our programmes, our data shows that more females apply for our programme at HO and SO level and more males apply for our programme at Grade 7 and Grade 6 level, although the difference is only 2%. Acceptance rates for both these programmes is 55% for females; promotion rates on the Grade 7 to Grade 6 programme for females is 56% (just above the acceptance rate) and for the HO to SO programme it is 51%.

We have also carried out actions to improve our female intake on our Tax Specialist Programme, which feeds our Grade 7 cohort once successful. We identified issues with attracting high quality female candidates to this programme and turning offers into acceptances.

There were some disparities in our numerical skills testing, and gaps in the way we were communicating our offer for graduates. We undertook multiple actions, including reviewing and refreshing our marketing strategy, targeting talent pools and reviewing our process to ensure we addressed any points of potential bias.

In 2015 we had 24% female starters on this programme, which has now increased to 49% (from an applicant pool of 42%) in 2020. We will continue with our work on this important talent pool.

In 2022 we are conducting a review of our Talent and Accelerated Development Strategy and will ensure that this includes consideration of gender impacts.

Specific actions for VOA

Recruitment

Civil Service Resourcing have direct responsibility for recruiting all VOA employees. The aim of the vacancy filling is to find the best available people for our jobs, applying the fundamental principle of selection for appointment on merit, through fair and open competition.

Talent and development

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

Summer 2021 saw more in-depth conversations with SEO colleagues about their career aspirations, including discussing their strengths and development needs.

We continue to encourage colleagues to benefit from the variety of programmes we have across the department such as Future Leaders Scheme, Leap, Embrace, Ascend and Fast Stream.

We have also promoted surveying as a career for women, working with RICS and the Deputy Head of Profession to increase the percentage of women in surveying roles.

Mentoring schemes

In September 2020 the VOA Mentoring Scheme was launched. This has allowed colleagues to discuss many different aspects of their work life, including helping them to think about their career and personal development.

The VOA and HMRC STRIDE Mentoring Scheme (supporting social mobility) and the Civil Service Disability Mentoring Programme (supporting disabled colleagues) have also been supported along with other Civil Service mentoring schemes.

Flexible working

As part of our Transformation programme, we will continue to support people who wish to work more flexibly, across all grades. Most roles are available as job-share, reduced hours, or flexible working patterns. We have also introduced hybrid working.

Leave

In 2021 the VOA’s Supporting Parent (Paternity or equivalent) leave offer was increased from 2 weeks to 4 weeks, enabling colleagues to increase their time at home with their children.

Diversity group

The VOA’s Gender Group supports colleagues and encourages action across the agency. The group provides a space where members can reflect, raise any issues and discuss concerns. These invaluable insights then directly inform the work of the volunteers, including improving support for all people.

The Gender Group also works with the VOA’s People Group, other diversity and inclusion groups and networks across the Civil Service to link into wider Civil Service work. Their aim is to understand the challenges colleagues may face in relation to gender and intersectional issues, in order to provide or signpost the appropriate support. This includes raising awareness with managers and colleagues about the effect that the menopause can have through providing menopause support guidance and workshops.

Bonus (non-consolidated) payments

Until September 2020 we ran a bonus award scheme based on 2 levels of awards. This scheme was monitored, with an assurance panel that analysed the distribution of non-consolidated payments in-year to address issues identified. From November 2020 we introduced a new voucher based system with awards at £20 and have been regularly monitoring distribution of the awards. The first full year under the new scheme will be reflected in the 2022 gender pay gap report.

Equal pay audit

We published our most recent equal pay audit in 2020. The audit compared pay across multiple protected characteristics, within roles of the same grade and found no significant pay differences. The next equal pay audit will be undertaken shortly and will look at data following the 2021 pay award.

Wellbeing

We are working to raise awareness of work-life balance and caring responsibilities, regardless of gender identity. We want to foster an environment where we can talk openly about health concerns, providing support to our colleagues and managers.

Annex

HMRC and VOA gender pay gap results - 2021

	Proportion
Mean gender pay gap - Ordinary pay	3.4%
Median gender pay gap - Ordinary pay	7.9%
Mean gender pay gap - Bonus pay in the 12 months ending 31 March	-0.1%
Median gender pay gap - Bonus pay in the 12 months ending 31 March	0.0%
The proportion of male employees paid a bonus in the 12 months ending 31 March	63.3%
The proportion of female employees paid a bonus in the 12 months ending 31 March:	62.3%

Proportion of male and female employees in each quartile

Quartile	Female	Male
First (lower) quartile	51.6%	48.4%
Second quartile	55.7%	44.3%
Third quartile	50.4%	49.6%
Fourth (upper) quartile	46.5%	53.5%

Total staff

Female: 35,552

Male: 31,563

Total: 67,115