Corporate report

HMRC 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 (PSED) 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 (52.7%, down from 53.1% in 2021). Women are still over-represented in the administrative grades, making up almost 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 57.9% from 50.8% in 2021), with a smaller decrease in the lower middle quartile (down to 53.9% from 56.2% in 2021).

Additionally, the percentage of all men working in London, and therefore receiving higher pay than colleagues working nationally, has increased from 9.9% in 2021 to 14.2% now in 2022, whereas this percentage for all women has remained at 9.2%.

Our mean and median gender pay gaps have increased since 2021. The overall mean gender pay gap has increased by 3.8% from last year’s figures and is now 6.6%. The median gender pay gap is 12.6%, an increase of 3.8% 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. The mean gender pay gap for colleagues working full-time is 1.7%, a small increase from 2021; for part-time colleagues however, the mean gender pay gap is 10.1%. The median gender pay gap for full-time colleagues is 0%, but for part-time colleagues is 4.3%.

Just over half of our full-time colleagues are women, but 77.7% of our part-time colleagues, who make up 23.3% of the total workforce, are women. Whilst the overall percentage of part-time colleagues has reduced from 26.6% to 23.3%, the percentage of those who are women has remained static.

91.9% of part-time colleagues work outside of London (a very small decrease on last year’s figure of 0.6%), the vast majority of whom are women. Almost half of these colleagues (45.3%) are AO grade, of which almost 80% are women.

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 full-pay relevant employees in each pay quartile

The gender pay is a measure of the difference between men and women 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. 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.

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 2022 and covers 68,250 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 uses the standard civil service grading system ranging from Administrative Assistant (AA) to Senior Civil Service (SCS).

Since 2021, HMRC has increased its workforce by 4,672 with the largest decreases in our AA and Administrative Officer (AO) grades. Overall, the number of women has increased by 2,209 and the number of men has increased by 2,463.

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

Table 1: HMRC 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	7,989 (24.7%)	11,463 (31,9%)	58.9%
EO	7,334 (22.7%)	8,411 (23.4%)	53.4%
HO/SO	11,980 (37.1% )	11,566 (32.2%)	49.1%
Grade 7/6	4,583 (14.2% )	3,689 (10.3%)	44.6%
SCS	263 (0.8%)	229 (0.7%)	46.5%
Non-grade	163 (0.5%)	580 (1.6%)	78.1%
Total	32,312	35,938	52.7%

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 (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.

In HMRC, the AA grade consists of a single spot rate of pay, whereas grades to G6 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 UK, each grade has 2 basic pay ranges, ie London and national. The split between men and women on the London pay range is 50.1% and 49.9% favouring men. The national pay range split is 53.1% and 46.9% favouring women employees. 9.2% of all women are on the London pay range, no change from 2021. 14.2% of all men are on the London pay range, an increase of 4.3%.

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.

Our in-year reward system is now Simply Thanks vouchers of £20 for appreciation of good work and positive behaviours.

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 value of the pay awards is negotiated with our 2 recognised trade unions: this does not include receipt of Simply Thanks vouchers mentioned above.

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 gap data

Gender composition

Image showing that females make up 52.7% of the workforce at 35,938, down by 0.4% from 2021, and males make up 47.3% at 32,312, up by 0.4%.

2022 gender pay gaps in hourly pay

Mean pay gap

Image showing the mean hourly rate is £17.03 for females and £18.23 for males, a gap of 6.6%. This is an increase of 3.8% from 2021.

HMRC’s mean gender pay gap in hourly pay has again 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 3.8% 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 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 26.5% of women in the Senior Officer (SO) grade, 15.3% increase of women in Grade 7 and 10.7% increase in Grade 6. There was an decrease of 8.7% of women in SCS from last year.

Part time employees make up 23.3% of the overall workforce of which 77.7% are women.

91.9% of part time colleagues are based outside of London of which 78.3% are women and 45.3% of the part time workforce are of AO grade of which 79.8% are women.

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, ie 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 4).

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

Quartile	Female (%)	Male (%)
First (lower) quartile	57.9	42.1
Second quartile	53.9	46.1
Third quartile	48.6	51.4
Fourth (upper) quartile	46.3	53.7

Bonus pay gap data

2022 Bonus pay gaps

Mean bonus gap

Image showing the mean bonus pay gap between males and females is 14.7%, an increase of 14.7% from 2021.

Median bonus gap

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

Bonus received

Image showing 38.8% of females and 37.9% of males received a bonus in 2022. This was down by 23.4% for females and down by 25.5% for males from 2021.

For bonus pay we captured data for the 12-month period between 1 April 2021 and 31 March 2022 from our in-year Simply Thanks vouchers scheme.

HMRC’s bonus pay gap have decreased this year as 38.8% of women and 37.9% of men received a bonus. This is an increase from 2021 whereby 62.2% of women and 63.3% of men received a bonus. The reason for the decrease was the removal of 2 of HMRC’s previous reward schemes being the Recognition Award and High Performance Award.

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 SO. 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 we are proud to enable our people to work alternative working patterns including reduced hours if it suits their lifestyle.

The median gender bonus pay gap increased to 12.6% which is due to the large number of Simply Thanks vouchers that we issued during the year.

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:

• 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