Corporate report

HMRC and Valuation Office Agency gender pay gap report 2022

Published 24 November 2022

Introduction

As HMRC’s Gender Champion and Chief People Officer, I am pleased to publish our 2022 gender pay gap report.

Our published Public Sector Equality Duty objectives focus on creating an inclusive, respectful and representative workplace that reflects the society we serve, where all colleagues are able to thrive, and where difference is valued.

Our goal is to create a great place to work for all colleagues, through embedding equality, diversity and inclusion into everything we do, taking a holistic approach to creating an inclusive workplace and ensuring our actions are data-driven and evidence led.

It is clear that to achieve this, we have much to do. We are working closely with a number of our stakeholder groups to identify specific actions we can take collectively to reach our goal: this includes reviewing our processes to help us make inclusive decisions, ensuring shared accountability across the department for achieving our PSED objectives, and ensuring colleagues have the right tools and capability to make decisions, undertake actions and take personal responsibility to create an inclusive workplace.

We know that workforce distribution drives gender pay gaps. Our figures for 2022 show a slight decrease in women overall (52.6%, down from 53.0% in 2021). Women are still over-represented in the administrative grades, making up over 58% of colleagues in the lower quartile, and almost 54% of colleagues in the lower middle quartile.

Whilst there has been little change from last year on the overall figure, there has been a significant increase in women in the lower quartile (up to 58.3% from 51.6% in 2021), with a smaller decrease in the lower middle quartile (down to 53.7% from 55.7% in 2021).

Our mean and median gender pay gaps have increased since 2021. The overall mean gender pay gap has increased by 3.4% from last year’s figures and is now 6.8%. The median gender pay gap is 12.6%, an increase of 4.7% on 2021 figures.

There are differences in our gender pay gaps by working commitment, and the majority of our part-time colleagues are women, with a large proportion in administrative grades.

Just over half of our full-time colleagues are women, but 77.7% of our part-time colleagues, who make up 18% of the total workforce, are women. Whilst the overall percentage of part-time colleagues has reduced from 26.5% to 23.1%, the percentage of those who are women has remained static.

Creating a more balanced workforce takes time, and it also takes a holistic and multi-faceted approach. I am committed to deepening our understanding of what is driving our gender pay gaps and identifying where we can not only address those gaps but build on those areas of the business that are showing improvements, so we can learn from them and potentially replicate in other business groups.

We have already begun work with our stakeholders to create an HMRC-wide inclusion plan which will serve to bring all our inclusion actions and interventions into one place, ensuring greater connectivity across the department in identifying disparities and sharing good practice.

As part of this plan, and to help address the gender pay gaps we have identified, we will continue with the actions I identified last year to build inclusion into our policies and processes, whilst utilising more nuanced data at a more granular level, reviewed by each business area, to help identify disparities, and successes, in balancing our workforce.

This will enable us to apply a more intersectional lens and develop interventions that are tailored to our organisational context, and to different areas of the business. This will give us a clearer picture of where to direct our efforts and will ensure we are aligned with the approach set out in the Civil Service Diversity and Inclusion strategy.

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
• the mean and median gender bonus pay gaps
• the proportion of men and women who received bonuses
• the proportion of men and women in each pay quartile

The gender pay 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, i.e. 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.

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 and VOA as at 31 March 2022, and covers 72,111 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.

Organisation structure and pay

HMRC and VOA uses the standard Civil Service grading system ranging from Administrative Assistant (AA) to Senior Civil Service (SCS).

Since 2021, HMRC and VOA has increased its workforce by 4,996, with the largest decreases in our AA and Administrative Officer (AO) grades. Overall, the number of women have increased by 6.7% and the number of men have increased by 8.3%.

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

Table 1: HMRC and VOA data as at 31 March 2022 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	8,310 (24.3%)	11,989 (31.6%)	58.6%
EO	7,783 (22.8%)	8,976 (23.7%)	53.6%
HO/SO	12,792 (37.4%)	12,263 (32.3%)	48.9%
Grade 7/6	4,858 (13.7%)	3,884 (10.2%)	44.4%
SCS	275 (0.8%)	238 (0.6%)	46.4%
Non-grade	163	580
Total	34,181	37,930	52.6%

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.

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. In February 2021, HMRC trade union members voted to accept a three-year pay and contract reform offer.

The 2022 pay award is the last of the annual awards to be paid from the three-year deal (2020 to 2021, to 2022 to 2023).

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.

The values of the pay award are negotiated with the 2 trade unions recognised by HMRC and VOA.

Senior Civil Service

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

The SCS structure consists of 3 grades: Deputy Director (SCS1); Director (SCS2); and Director General (SCS3), and each grade has a set pay range with a minimum and maximum rate of basic pay.

The settlement date for annual pay awards is 1 April. The public sector pay pause in 2021 meant there were no consolidated pay awards for the SCS in 2021.

Non-consolidated Performance Related Pay in 2021 was comprised of 2 elements:

• a non-consolidated, non-pensionable award linked to exceptional (moderated) performance against objectives for the performance year 2020 to 2021
• a non-consolidated, non-pensionable award linked to short-term exceptional performance during the year

The parameters for SCS pay in HMRC is governed by the Cabinet Office and managed by HMRC’s Executive Committee.

Gender pay gaps data

Gender composition

Image showing that females make up 52.6% of the workforce at 37,930, down by 0.4% from 2021, and males make up 47.4% at 34,181, up by 0.4%.

2022 Gender pay gaps in hourly pay

Mean pay gap

Image showing the mean hourly rate is £17.05 for females and £18.29 for males, a gap of 6.8%. This is an increase of 3.4% from 2021.

HMRC and VOA’s mean gender pay gap in hourly pay have increased this year. A major factor would be due to more women having been promoted or recruited into administrative grades.

Median pay gap

Image showing the median hourly rate is £14.98 for females and £17.13 for males, a gap of 12.6%. This is an increase of 4.7% from 2021.

The median gap would be influenced by the higher proportion of women compared to men in the administrative grades at AA and AO. This would therefore be a drop in the median salary down when you look at the median for men and women in comparison.

There continues to be a higher proportion of men in the senior grades of Grade 7, Grade 6 and SCS than of women. Therefore, men continue to have higher average earnings at the senior grades.

Compared to 2021, there was an increase of 25.4% women in the Senior Officer grade, a 16.1% increase of women in Grade 7 and an 11.3% increase in Grade 6.

There was a 26.8% decrease of women in the AA grade and a 5.4% 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 women remain in the administrative 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

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, ie that proportionally more women than men are in administrative 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 4).

Table 2: proportion of full-time men and women in each pay quartile

Quartile	Female (%)	Male (%)
First (lower) quartile	58.3	41.7
Second quartile	53.7	46.3
Third quartile	48.7	51.3
Fourth (upper) quartile	45.9	54.1

Bonus pay gap data

2022 bonus pay gaps

Mean bonus gap

Image showing the mean bonus pay gap between males and females is 13.6%, an increase of 14.6% from 2021.

Median bonus gap

Image showing the median bonus pay gap percentage between males and females is 0%, the same as 2021.

For bonus pay we captured data for the 12-month period between 1 April 2021 and 31 March 2022 from our in-year and end-year reward schemes.

HMRC and VOA’s bonus gaps have decreased this year as 39.5% of men and 40.3% of women received a bonus. In 2021, 63.3% of men and 62.3% of women received a bonus. HMRC and VOA’s in-year reward system allows individuals to be rewarded for exceptional performance in real-time.

Bonus received

Image showing 40.3% of females and 39.5% of males received a bonus in 2022. This was down by 22.0% for females and down by 23.8% for males from 2021.

HMRC follows the standard public sector approach to pay and reward, and an agreed fund is reserved for payment of non-consolidated, non-pensionable awards linked to performance. As mentioned, our in-year reward scheme is the ‘Simply Thanks’ voucher scheme. This is where vouchers of £20 are awarded as appreciation for good work and positive behaviours.

Senior Civil Servants are not eligible for these vouchers, and they are more typically allocated to colleagues working in roles at grades AA to Senior Officer. The larger number of women in these 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 offer our people 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 working part-time. For VOA, bonuses for delegated grades bonuses are in the form of in-year rewards only which are not pro-rated.

The median gender bonus pay gap remains unchanged from 2021 at 0%, which for HMRC is due to the large number of Simply Thanks vouchers that were issued during the year

Both HMRC and VOA now operate an in-year reward system of Simply Thanks vouchers of £20 for appreciation of good work and positive behaviours. VOA also provide for £100 for exceptional effort but these awards require sign off at director level.

Updated actions

HMRC is progressing with its comprehensive review of our recruitment approach and performance and development conversations. This work is forming part of a review of employment foundations to ensure that all aspects of job design, job adjustment and job requirements are clearly set out and there is organisational capability to both develop job roles, assess against the requirements and adjustment where required for example with special working arrangements.

Recruitment figures show 6,749 women and 6,256 men joined the workforce and promotion rates are as follows; 5074 women were permanently promoted whilst 126 were on temporary promotion. For men there was 4,748 permanent promotions and 124 on temporary promotions. We’re looking forward to new colleagues progressing their careers in HMRC, noting that this will take time to impact on our representation rates, and demand action from across business areas in order to address workforce imbalances.

This planned work has been slightly delayed by the ongoing impacts of the pandemic and return to office this year. We have pivoted to providing comprehensive and inclusive support to all colleagues to enable them to return to the office well and adopt our hybrid ways of working.

This approach prioritised supporting colleagues’ specific personal circumstances and removing barriers to return, including a minimum notice period for all colleagues and extended return period in order to support more complex circumstances such as caring. This is alongside the ability to extend specific support to parents of school aged children and people with dependant caring requirements. So far we have supported circa 63,000 colleagues to return to the workplace.

In June 2022 we also migrated colleagues to our new/updated approach to Special Working Arrangements aimed at increasing the capacity of the organisation to offer patterns such a part year working to a greater number of colleagues at the time they need it; 3,978 women and 1,207 men have special working arrangements.

Having reformed our parenting policies in the last year 1,502 colleagues have accessed the rights set out within the policy including our increased secondary parenting leaving policy.

The design standard for all of our 14 regional centre offices (and refurbished retained offices) includes recovery or first aid rooms. These rooms provide a quiet, comfortable atmosphere that is clean, healthy and safe with appropriate facilities for nursing mothers to express milk or breastfeed their baby. We also provide fridges, where milk can be safely and hygienically secured. The directory information for each building signposts nursing mothers to these rooms.

In June 2021, we introduced the provision of free emergency sanitary products to colleagues across the HMRC estate to ensure colleagues can access products at the point of need.  We want to continuously improve our health and wellbeing offer within HMRC, and this was a great opportunity to do that.  The products are available for emergency use.

We have monitored our Tax Specialist Programme since 2015 when we undertook specific action to ensure a balanced cohort – this is monitored annually. We want to ensure that the programme is inclusive and diverse and offers the opportunity for everyone to develop their full potential, and will be commencing a review involving our trade union colleagues and trainees, along with representatives from different areas of the business, to take this forward.

Actions for HMRC

• undertake planned performance and recruitment reviews, including for the latter ensuring non-biased language in job adverts and ensuring inclusive role profiles
• undertake review of Tax Specialist Programme to ensure it is representative, and inclusive for all colleagues
• undertake a disparity audit across multiple protected characteristics, in order to delve more deeply into the data, enabling us to develop more targeted data-led interventions.
• work with business areas to analyse this more nuanced data throughout the employee lifecycle, taking working commitment into account, to identify gaps and opportunities, and develop specific actions focussing on improving representation across our workforce

Actions for VOA

VOA supports the fair treatment and reward of all staff irrespective of gender. We have pay and conditions of employment that do not discriminate unlawfully and are free from bias by ensuring that equal pay is in place for like-for-like work, work rated as equivalent and work of equal value. We use a job evaluation system to assess the relative value of jobs across the organisation, and this provides evidence in support of the allocation of jobs within our grading structure.

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 progress, whether to more senior roles, or other roles in the Agency or the Civil Service.

During 2022, we ran talent roadshows for senior colleagues to help them identify the right talent and with the greatest potential to succeed.

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

We have also promoted surveying as a career for women, working with the Royal Institution of Chartered Surveyors (RICS) and the VOA’s Deputy Head of Surveying Profession to increase the percentage of women in surveying roles. While there is still more work to do, particularly in technical leadership roles, we compare very favourably to the wider property industry in terms of representation where RICS’ latest data shows that just 19% of RICS members are female. Our data for October 2022 showed that women now comprise:

• 41.5% of our chartered surveyors
• 14.3% of our specialist surveyor caseworkers
• 33.6% of our technical leaders

Mentoring schemes

During the reporting period, we continued to provide mentoring opportunities to all colleagues. This includes a VOA wide mentoring scheme (first launched in September 2020) which offers both traditional and reverse mentoring, with the ability to ask for a mentor from a different profession. The VOA Mentoring Scheme 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/HMRC Stride Mentoring Scheme (supporting social mobility) and the Civil Service Disability Mentoring Programme (supporting disabled colleagues) have also been promoted 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.

Hybrid working has also been introduced and embedded into the Agency.

Leave

In 2021 the VOA’s Paternity Leave offer was increased from two weeks to four weeks, enabling colleagues to increase their time at home with their children.

Diversity group

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

The Gender Group also work with the VOA’s People Group and with other diversity and inclusion groups and network across the Civil Service to link into wider Civil Service initiatives. This is with the aim of understanding the challenges colleagues may face in relation to gender and intersectional issues, share learning and provide or signpost the appropriate support.

This includes raising awareness with managers and colleagues about the impact that the menopause can have through menopause support guidance and workshops.

Bonus (non-consolidated) payments

Until September 2020 we ran a bonus award scheme based on two levels of awards. This scheme was monitored including having 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. In exceptional cases, awards of £100 may be made but these require sign off at director level. We regularly monitor distribution of the awards to address any issues identified. The first full year under the new scheme is reflected in this 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. We are currently working on the next equal pay audit which looks 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.