Corporate report

HMRC gender pay gap 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 1.6% from last year’s figures, and 4.4% overall over the last 2 years. When broken down by working commitment, the gap is 1% for colleagues working full-time and 1.2% for colleagues working part-time. However, there is much more to do. Our median gender pay gap has increased over the last year by 2.9%, although over the last 2 years it has reduced from 9.3% to 8.8%.

The workforce distribution in HMRC 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 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 is a measure of the difference between men’s and women’s average earnings 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 to HMRC. 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.

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

This report gives the gender pay gap data in HMRC as at 31 March 2021 and covers 63,578 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 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 has reduced its workforce by 1,084 with the largest decreases in our AA and Administrative Officer (AO) grades. Overall, the number of women has reduced by 1,188 and the number of men has increased by 104.

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

Table 1: HMRC 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	8,491 (28.4%)	12,265 (36.4%)	59.1%
EO	6,848 (22.9%)	7,833 (23.2%)	53.4%
HO/SO	9,711 (32.5%)	9,372 (27.8%)	49.1%
Band T	352 (2.2%)	293 (0.9%)	45.4%
Grade 7/6	4,065 (13.6%)	3,234 (9.6%)	44.3%
SCS	253 (0.8%)	231 (0.7%)	47.7%
Non-grade	129	501
Total	29,849	33,729	53.1%

Delegated grades - AA to Grade 6

As a Civil Service department, HMRC 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.

In HMRC, 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.

Given our geographical offices across the United Kingdom, each grade has 2 basic pay ranges, London and national. The split between men and women on the London pay range is 48.9% and 51.1% favouring female employees. The national pay range split is 46.7% and 53.3% favouring female employees.

Out of the whole female workforce, 9.2% of women are on the London pay range, a decrease of 2.9% from 2020. In the male workforce 9.9% of men are on the London pay range, a decrease of 4.5%.

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 award covering 1 June 2020 to 31 May 2021 for HMRC colleagues at AA to Grade 6.

Our in-year reward system for this reporting period compromised of 3 reward schemes:

• ‘Simply Thanks’ vouchers of £20 for appreciation of good work and positive behaviours
• Recognition Award for exceptional short-term performance (scheme closed 31 May 2021)
• High Performance Award for exceptional sustained performance leading to positive results typically up to a 6-month period (scheme closed 31 May 2021)

Dependant on the nature of the work undertaken in certain roles, we may also pay additional allowances or supplements, 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 Director General (SCS3).

Gender pay gap data

Gender composition

Image showing that females make up 53.1% of the workforce at 33,729, down by 0.9% from 2020, and males make up 46.9% at 29,849, up by 0.9%.

2021 gender pay gaps in hourly pay

Mean pay gap

Image showing the mean hourly rate is £14.95 for females and £15.38 for males, a gap of 2.8%. This is a reduction of 1.6% from 2020.

Median pay gap

Image showing the median hourly rate is £13.24 for females and £14.51 for males, a gap of 8.8%. This is an increase of 2.9% from 2020.

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

However, HMRC’s median gender pay gap in hourly pay has increased by 2.9% 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 8.3% of women in the Senior Officer (SO) grade, 10.4% increase of women in Grade 7 and 19.7% increase in Grade 6. There was an increase of 21.6% of women in SCS from last year.

Part-time employees make up 26.6% of the overall workforce of which 77.7% are women; 92.5% of part-time colleagues are based outside of London of which 78.2% are women and 47.7% of the part-time workforce are AO grade of which 80.3% are women.

The mean gender pay gap is 1.0% for full-time employees which is a 0.2% reduction from 2020 and the mean gender pay gap for part-time employees is 1.2% which is a 7.8% decrease from 2020. The median gender pay gap is 0% for full time employees and -8.6% for part-time.

The pay gap varies by location (see Annex A) as well as working pattern and the distribution of women by grade and we are working to understand the influence of each factor to inform our actions to close gender pay gaps.

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, 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 specific actions section).

Table 2: pay quartiles

Quartile	Female (%)	Male (%)
First (lower) quartile	50.8	49.2
Second quartile	56.2	43.8
Third quartile	50.4	49.6
Fourth (upper) quartile	46.9	53.1

Bonus pay gap data

2021 Bonus pay gaps

Mean bonus gap

Image showing the mean bonus pay gap between males and females is 0%, a reduction of 0.6% from 2020.

Median bonus gap

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

Image showing 62.2% of females and 63.4% of males received a bonus in 2021. This was up by 0.4% for females and up by 0.6% for males from 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.

This year 62.2% of women and 63.4% of men received a bonus. This is an increase from 2020 whereby 61.8% of women and 62.8% of men received a bonus. We believe this is due to the improvements made to our in-year reward system, enabling individuals to be rewarded for exceptional performance in real-time.

Our bonus schemes 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.

This of course changes when you look by grade so that the bonus gap for AAs is 11.4% in favour of men. However, for the rest of the delegated grades the bonus gap favours women. Please see Annex B for all other grades.

At HMRC we are proud to enable our people to work 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 who work part-time. As with last year, the median gender bonus pay gap remains at 0%, which is due to the large number of Simply Thanks vouchers that we issued during the year (Simply Thanks made up 60% of all bonuses).

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 offer 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 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, 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

1.We will profile and encourage flexible and part-time working for men, women, non-binary and gender fluid colleagues 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 supporting parent 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. Data is not yet available for colleagues who identify as neither male nor female.

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 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 leave (akin to paternity leave and other equivalents) 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 Performance and Development Conversations 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.

Annex A

HMRC gender pay gap results by location - 2021

	London (%)	National (%)
Mean gender pay gap - Ordinary pay	1.2	2.9
Median gender pay gap - Ordinary pay	1.4	0.6
Mean gender pay gap - Bonus pay in the 12 months ending 31 March	0.7	-0.4
Median gender pay gap - Bonus pay in the 12 months ending 31 March	20.0	-10.0
The proportion of male employees paid a bonus in the 12 months ending 31 March	66.7	63.1
The proportion of female employees paid a bonus in the 12 months ending 31 March	66.4	61.8

Proportion of male and female full pay relevant employees in each quartile

Quartile	Female	Male	Female	Male
First (lower) quartile	53.0%	47.0%	48.5%	51.5%
Second quartile	51.4%	48.6%	55.4%	44.6%
Third quartile	47.0%	53.0%	51.9%	48.1%
Fourth (upper) quartile	49.0%	51.0%	48.8%	51.2%

Staff	London	National
Female	3,097	30,632
Male	2,962	26,887
Total	6,059	57,519

Annex B

HMRC gender pay gap results by grade - 2021

	AA	AO	O	HO	BT	SO	G7	G6	SCS
Mean gender pay gap - Ordinary pay	-7.1%	-5.9%	-4.2%	-2.2%	0.1%	-1.0%	-2.0%	-1.3%	0.5%
Median gender pay gap - Ordinary pay	-13.5%	-13.5%	-7.4%	-0.8%	0.0%	0.8%	-1.8%	-2.0%	0.4%
Mean gender pay gap - Bonus pay in the 12 months ending 31 March	16.7%	-2.2%	-6.9%	-10.8%	-13.9%	-10.8%	-7.7%	-1.5%	-8.1%
Median gender pay gap - Bonus pay in the 12 months ending 31 March	16.7%	0.0%	0.0%	-13.6%	-10.7%	-6.7%	0.0%	-8.0%	0.0%
The proportion of male employees paid a bonus in the 12 months ending 31 March	62.3%	47.1%	62.9%	69.9%	59.7%	78.2%	77.6%	76.3%	57.3%
The proportion of female employees paid a bonus in the 12 months ending 31 March	63.7%	46.4%	65.6%	72.4%	63.8%	83.1%	79.9%	79.1%	58.9%

Proportion of male and female employees in each quartile

Quartile	AA female	AA male	AO female	AO male	O female	O male	HO female	HO male	BT female	BT male	SO female	SO male	G7 female	G7 male	G6 female	G6 male	SCS female	SCS male
First (lower) quartile	28.4%	71.6%	42.3%	57.7%	42.7%	57.3%	44.3%	55.7%	46.0%	54.0%	45.3%	54.7%	40.6%	59.4%	41.8%	58.2%	46.6%	53.4%
Second quartile	36.4%	63.6%	42.7%	57.3%	43.4%	56.6%	42.7%	57.3%	41.1%	58.9%	46.6%	53.4%	40.8%	59.2%	42.8%	57.2%	50.4%	49.6%
Third quartile	82.7%	17.3%	62.6%	37.4%	55.3%	44.7%	48.4%	51.6%	49.3%	50.7%	44.9%	55.1%	45.8%	54.2%	40.8%	59.2%	47.4%	52.6%
Fourth (upper) quartile	80.9%	19.1%	78.3%	21.7%	64.8%	35.2%	57.4%	42.6%	44.0%	56.0%	57.1%	42.9%	48.6%	51.4%	51.6%	48.4%	46.6%	53.4%

Staff	AA	AO	O	HO	BT	SO	G7	G6	SCS
Female	523	11,742	7,833	6,244	293	3,128	2,348	886	231
Male	316	8,175	6,848	6,436	352	3,275	2,940	1,125	253
Total	839	19,917	14,681	12,680	645	6,403	5,288	2,011	484

Annex C

HMRC gender pay gap results by full-time/part-time - 2021

	Full-time	Part-time
Mean gender pay gap – Ordinary pay	1.0%	1.2%
Median gender pay gap – Ordinary pay	0.0%	-8.6%
Mean gender pay gap - Bonus pay in the 12 months ending 31 March	-10.2%	-8.0%
Median gender pay gap - Bonus pay in the 12 months ending 31 March	-13.6%	-41.7%
The proportion of male employees paid a bonus in the 12 months ending 31 March:	64.9%	53.1%
The proportion of female employees paid a bonus in the 12 months ending 31 March:	66.5%	55.6%

Proportion of male and female full pay relevant employees in each quartile

Quartile	Female %	Male %	Female %	Male %
First (lower) quartile	42.8%	57.2%	75.9%	24.1%
Second quartile	44.2%	55.8%	86.1%	13.9%
Third quartile	43.5%	56.5%	85.1%	14.9%
Fourth (upper) quartile	42.2%	57.8%	81.9%	18.1%

Staff	Full-time	Part-time
Female	20,567	13,162
Male	26,068	3,781
Total	47,635	16,943

Total staff

Female: 35,552
Male: 31,563
Total: 67,115