HMRC and Valuation Office Agency gender pay report 2023

Introduction

As HMRC’s Gender Equality Champion and Chief People Officer, I am pleased to publish our 2023 Gender Pay Gap (GPG) report.

I know that achieving a respectful, inclusive and representative workforce that reflects the society we serve is crucial. We strive to be an organisation where all colleagues are able to thrive, and where difference is valued. This demands focus, long-term organisation level goals, and accountability at all levels. 

Our published Public Sector Equality Duty (PSED) objectives provide us with a framework to achieve this, driving our actions to embed equality, diversity and inclusion into everything we do, taking a holistic approach to creating an inclusive workplace.

Since the publication of our last GPG report, we have strengthened our approach to equality, diversity and inclusion at HMRC – clarifying our responsibilities and accountabilities and becoming more data-driven and evidence led, to ensure we focus on the right priorities to achieve the greatest change.

Our ambition is for equal representation of men and women at all grades. Our diversity data identifies where in the Department there are differences in the representation of men and women, highlighting how distribution of women in our workforce drives gender pay gaps. Our data evidences that continuing progress at the same rate will not bring about the improvements required. We have set a departmental level inclusion priority to increase workforce diversity at senior grades: increasing the representation of women in SCS, Grade 6 and Grade 7 levels will contribute to closing the gender pay gap.

Our mean pay gap has reduced from 6.8% in 2022 to 6.1%. However, our median pay gap has increased from 12.6% to 13.5%. Women make up 52.3% of our workforce overall but are over-represented in the administrative grades, making up 57.6% of colleagues in the lower quartile, and under-represented in the highest quartile (senior grades) making up 46.1% of colleagues in that quartile. Our highest disparity is in the highest quartile, highlighting the importance of focussing our efforts on balancing our senior grades.

There are differences in our GPGs between those who work full-time, and those who work part-time hours. Women make up over 50% of our current workforce, but the majority of our part-time colleagues are women with a large proportion in administrative grades. 

I remain committed to deepening our understanding of the data, and of where and how we need to best focus our efforts. One of our actions from the 2022 GPG report was to analyse our diversity data across all protected characteristics and points in the employee lifecycle, in order to understand better where we are making good progress, where we have further areas for improvement and to target interventions. We completed this work, analysing diversity data from the last 5 years. From this, we developed 12 inclusion priorities with success measures at a corporate level, under which we are developing specific actions to work with business areas on. These priorities focus on where the greatest disparities or barriers for colleagues lie, or where progress is most needed.

Having corporate goals alone is not enough to effect change however. We said we would work with business areas to analyse data for each group against our organisation position, and work with them directly to identify what they already have in place and if it’s working, in order to inform future, targeted actions. These will be embedded into their People and Business plans and reported up to our Workplace and Workforce Steering Group, the committee with organisational responsibility for meeting our legal obligations under the Equality Act 2010, thereby firmly embedding equality and inclusion into our business. We have started this work, mapping data for each business against departmental priorities.

We firmly believe a holistic approach is needed to achieve our PSED objectives overall, and so along with our data-driven goals to create a representative workforce, we continue to work with colleagues to embed inclusive decision making into our business processes, and into our employee policies. We are undertaking a transformation of recruitment policy working across HR and Shared Services. 

As part of this review one of our key objectives is to optimise Equality, Diversity and Inclusion (EDI) outcomes, recognising that recruitment is a critical tool to both help the department bring in diverse talent and also progress it through the department. We will be undertaking a wider programme of upskilling across the department with relevant teams to ensure colleagues are aware of how to consider inclusion in business and policy decisions, and to help vacancy managers and others identify where it may be appropriate to use the provisions in the Equality Act to support our goal of balancing our most senior grades.

Additionally, we are setting clear parameters and expectations around staff networks, activity taking place in business groups, and actions being led at a regional level – by focussing different groups on different activities that best fit their purpose, we believe we can accelerate our progress in meeting our PSED objectives to create a representative, inclusive and respectful workplace. Specifically, we will be reviewing who we directly engage with across the business to bring them together to share good practice, and keep our collective efforts focussed on our organisation priorities and on the interventions that will make a difference.

Esther Wallington, Chief People Officer, HM Revenue and Customs

Overview

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

• the mean and median gender pay gaps in hourly pay
• the mean and median gender bonus pay gaps
• the proportion of men and women who received bonuses
• The proportion of men and women 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, meaning that 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 the data, 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 2023, and covers 73,226 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 2022, HMRC and VOA has increased its workforce by 1,115, with the largest decreases in our AA and AO grades. Overall, the number of women has increased by 1.1% and the number of men has increased by 2.1%.

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 2023 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	8,467 (24.3%)	11,999 (31.3%)	58.6%
EO	7,617 (21.8%)	8,763 (22.9%)	53.5%
HO/SO	13,342 (38.2%)	12,789 (33.4%)	48.9%
Grade 7/6	5,124 (14.7%)	4,218 (11.0%)	45.1%
SCS	286 (0.8%)	246 (0.6%)	46.2%
Non-grade	54	321
Total	34,890	38,336	52.4%

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 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 and AO grades consists of a single spot rate of pay, whereas grades Officer 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; London and national. The split between men and women on the London pay range is 49.6%% and 50.4% favouring women. The national pay range split is 47.3% and 52.7% favouring women employees. 13.7% of all women are on the London pay range, a increase of 0.8%. 14.7% of all men are on the London pay range, an increase of 0.3%.

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 was the last of the annual awards to be paid from the three-year deal.

Our in-year reward system is 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.

VOA also provide for £100 for exceptional effort but these awards require sign off at Director level.

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 are governed by the Cabinet Office.

The 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, and for 2022 the award comprised 3 elements:

• a consolidated award paid to all our people in the SCS
• a non-consolidated, non-pensionable award linked to exceptional (moderated) performance against objectives for the performance year 2021 to 2022
• 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 balance

Image showing that females make up 52.4% of the workforce at 38,336, down by 0.2% from 2022, and males make up 47.6% at 34,890, up by 0.2%.

2023 Gender pay gaps in hourly pay

Mean pay gap

Image showing the mean hourly rate is £18.00 for females and £19.17 for males, a gap of 6.1%. This is an increase of 0.7% from 2022.

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 £15.54 for females and £17.97 for males, a gap of 13.5%. This is an increase of 0.9% from 2022.

The median gender pay gap however has increased by 0.9% from 2022.

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 2022, there was an increase of 8.6% women in the Senior Officer grade, a 9,7% increase of women in Grade 7 and a 5.3% increase in Grade 6.

There was a 11.1% decrease of women in the Administrative Assistant grade and a 0.5% decrease of women in the Administrative Officer 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

Table 2 shows the proportion of full-time men and women 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, 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: Pay quartiles

Quartile	Female (%)	Male (%)
First (lower) quartile	57.6	42.4
Second quartile	52.9	47.1
Third quartile	48.2	51.8
Fourth (upper) quartile	46.1	53.9

Bonus pay gap data

2023 bonus pay gaps

Mean bonus gap

Image showing the mean bonus pay gap between males and females is 1.1%, a decrease of 14.7% from 2022.

Median bonus gap

Image showing the median bonus pay gap percentage between males and females is 0%, the same as 2022.

For bonus pay we captured data for the 12-month period between 1 April 2022 and 31 March 2023 from our in-year and end-year reward schemes.

HMRC and VOA’s bonus gaps have decreased this year as 37.7% of men and 37.9% of women received a bonus. In 2022, 39.5% of men and 40.3% 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 37.7% of females and 37.9% of males received a bonus in 2023. This was down by 2.6% for females and down by 1.6% for males from 2022.

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 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 2022 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.

Actions for HMRC

We have made excellent progress over the last year to activate colleagues and identify where we need to focus our future activity. It is clear we still have much to do, as evidenced by the figures in this report.

Achieving our PSED equality objectives is a long-term goal, and many of our actions for the coming year are building on the ones I set out last year, along with additional activity to further strengthen our approach of shared accountability to achieve data-led goals, and provide our colleagues with the data, tools and governance to be able to make inclusive decisions and take personal responsibility to create an inclusive workplace.

Action 1

We said we would undertake planned performance and recruitment reviews, including for the latter ensuring non-biased language in job adverts and ensuring inclusive role profiles. Within our review of Performance and Development conversations, we’ve created HMRCs principles around job design and job adjustments. We aim to share these across the department in early 2024. This will support managers and colleagues to understand when and how to adjust roles where required, for example with special working arrangements. 

With regards the recruitment review, we completed the discovery phase of this project in October this year with a series of recommendations to take forward into new policy design. We aim to share our transformed policy with colleagues in spring 2024 having socialised with key stakeholders including departmental trade unions, beforehand.

Action 2

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. We have therefore commenced a review involving our trade union colleagues, Business Learning Managers and trainees, along with representatives across business areas, in taking this forward.

To date this has focused on content, and delivery and assessment methodology. We have implemented changes to Stage 1 of the foundation learning which have improved flexibility and accessibility and will continue to consider as part of the progression of the review when considering the more specialised areas of the programme.

Action 3

We said we would 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. We have completed this audit, which considered data over the last 5 years across all the diversity characteristics that we have data on, from which we developed 12 organisation priorities, one of which is the aforementioned objective for improving representation of senior women in HMRC. 

These priorities will be reviewed annually by our Executive Committee, with annual milestones, up to 31 March 2028. We will review progress against all of our priorities annually, and revise them as new issues arise, as our insight and quality of data grow, and as we make progress against them.

Action 4

We said we would work with business areas to analyse 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. We have reviewed business area data and priorities, and have been engaging directly with colleagues in each area leading on equality, diversity and inclusion activity. 

We have worked with them to identify where to embed EDI specific actions into their business and people plans, and agreed a governance route to provide scrutiny. We will continue this work, providing access to our recently developed Diversity Data Zone and information on how to use it, engaging with them to review the impact of any existing actions and develop new or additional interventions to support HMRC priorities. Progress will be scrutinised via our Workplace and Workforce Steering Group.

Action 5

Additionally, we have been working on a number of new operating models for our staff networks and champions, business groups, and regional teams, in order to clarify types of activity and accountability within each group. We have been consulting on this model, which is fundamental to our strengthened approach to inclusion, and will implement it this year. This provides a clear framework to enable colleagues to contribute to meeting our EDI organisational priorities and Public Sector Equality Duties.

Action 6

We will work with our existing staff networks to continue to raise awareness of sex-based issues within the workplace, including in relation to differential representation, job-share opportunities, and women’s health.

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 has 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 to 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 (July 2023) shows that just 18% of RICS members are female. Our data for September 2023 showed that women now comprise:

• 41% of our Chartered Surveyors
• 32% 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 across all grades who wish to work more flexibly. Most roles are available as job-share, reduced hours, or flexible working patterns.

Hybrid working has also been introduced and embedded into the agency. As we have more women in both junior grades and as carers, our hybrid working approach helps make us an attractive employer for women.

Leave

In 2021, the VOA’s paternity leave offer was increase 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 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 works with the VOA’s People group and with other diversity and inclusion groups and networks 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

We have operated a fully voucher based system for delegated grades since November 2020. This mainly consists of rewards of £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.

Equal pay audit

We published our most recent equal pay audit in September this year. The audit compared pay across multiple protected characteristics, within roles of the same grade and found no significant pay differences. 

Raising awareness of women’s health in the workplace

We have increased awareness of women’s health conditions and how it can impact on women in the workplace. This includes videos, guidance, and toolkits for example on menopause awareness to support those directly impacted. We are also increasing the number of allies from those not directly impacted who are able to speak up on behalf of others.

Increasing visible female role models

We have showcased a number of visible female role models to help inspire the next generation. This includes 2 female colleagues being nominated at the October 2023 ‘Inspiring Women in Property Awards’.