(Bloomberg) -- The U.K. statistics office will begin using tax data to measure parts of the economy next year, a move aimed at improving the quality of information it provides.
As part of a pilot program, the Office for National Statistics will initially focus on tax data from 20 industries, including accommodation and publishing, for its index of services and the output approach to gross domestic product. The change also means the office will no longer send out its monthly business surveys to smaller companies in the selected industries.
While statisticians have been working toward the use of such information, the latest development was recommended earlier this month by former Bank of England Deputy Governor Charlie Bean, who has been asked by the government to review data collection and production.
“The HMRC data offers a far greater coverage” for smaller companies, the ONS said. “We believe that the scale of this dataset has significant potential and will allow us to slim the number of forms dispatched to businesses.”
The statistics office said it doesn’t plan a “simplistic or blanket approach” and decisions on the use of HMRC turnover data will be made on an industry-by-industry basis. The 2016 trial excludes manufacturing, though this may be included at a later stage.
Commissioned in July, Bean’s interim review on statistics made five recommendations, which included refocusing on user needs, recruiting data scientists to probe new information sources, increasing economic expertise to quality-assure statistics, using administrative data sources and becoming more agile in responding to the characteristics of the economy. A final report will be published by next year’s budget on March 16.
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