LITRG: carrots, not sticks will deliver HMRC’s digital shift

In a letter to the government’s new Exchequer Secretary to the Treasury Dan Tomlinson MP, Victoria Todd, Head of LITRG, explains that encouraging people to use HMRC’s online services, rather than forcing them to, is the best way of ensuring these services succeed. 

LITRG warn that reducing phone and post support for taxpayers before digital services are suitably developed could damage trust in the tax system and potentially make it harder for HMRC to collect the taxes it is owed. 

The letter states: “Rather than forcing digital adoption, HMRC will have more success focusing efforts on building good quality digital services, encouraging people to use them and supporting them to do so – prioritising the ‘carrot’ over the ‘stick’.” LITRG welcome HMRC’s promise of targeted, adviser-led support for those who need it, but raise concerns about how HMRC will encourage people to self serve digitally – without making it harder for those who need targeted support to access it. 

The letter goes on to set out LITRG’s view that more work needs to be done to measure the quality of interactions between taxpayers and HMRC, including understanding whether taxpayers get the right answers to their questions. LITRG also emphasises importance of the HMRC Charter, and encourages senior leaders to ensure this important set of standards is embedded across HMRC and that the organisation is held to account for its performance against it. 

LITRG has also raised concerns over the lack of detail around HMRC’s preparations to help unrepresented taxpayers get ready for the launch of Making Tax Digital (MTD) for Income Tax in April next year. It has argued that participants should be exempt from penalties under the new regime or a full MTD cycle as they get used to the new regime.