HMRC roadmap offers prospect of genuine transformation

John Barnett, CIOT Vice President, said:

“If HMRC are able to deliver on everything in this roadmap¹ it will be genuinely transformational for UK tax administration.

“However, a lot of the proposals in this package are aspirational and lacking clear timelines. And even for those where a date is included, we should remember that back in 2016 the government told us the tax system would be fully digital by 2020.² HMRC, and wider government, digital plans have a history of slipping.

“Nevertheless, we welcome this plan, large parts of which reflect things we have been calling for:  in particular, plans to improve the ability of taxpayers and their agents to track claims, submissions and repayments in a number of areas. Our study last year, jointly with ICAEW, found that more than a third of attempts to contact HMRC are to chase progress on existing matters. HMRC can save huge amounts of time for taxpayers and their own customer service staff by building effective external tracking mechanisms into new digital systems, and also, where cost effective, for HMRC’s existing legacy systems.

“We also welcome the promise of secure three-way communication between HMRC, its customers and their agents. Our study last year identified a significant appetite to communicate with HMRC digitally, but at present security issues mean this is often not possible. Work in this area must be a priority, especially as HMRC have reiterated their intention to reduce reliance on post.

“The roadmap acknowledges that the key is to make HMRC digital systems and platforms accessible, attractive and easy enough that taxpayers choose to use them. To achieve this, HMRC must deliver high quality and effective digital services that work for taxpayers, and their agents, over a suitable implementation period. If not, HMRC run the risk of driving increased volume to traditional phone and post channels, making tax administration more difficult to navigate and eroding trust in the tax system. HMRC need to assess the quality of the digital services they are delivering, not just volume of use, and their performance metrics need to be further developed to do so.”

CIOT has welcomed HMRC’s statement that they will not be going ahead with Making Tax Digital for Corporation Tax, a proposal to require companies to provide quarterly electronic updates to HMRC directly from their digital records.

John Barnett commented:

“The complexity of corporate taxation means that quarterly reporting was always going to be costly and administratively burdensome for companies to comply with, particularly large and medium-sized companies and groups, with no obvious benefits to either them or HMRC. Most of these businesses are highly likely to have been using software and keeping digital records for many years already.”

Notes 

1. HMRC’s Digital Transformation Roadmap is published at HMRC Transformation Roadmap - GOV.UK
2. See original Making Tax Digital roadmap