Opinion Former Article

'Tomorrow's world' plan for tax administration must not leave anyone behind

HMRC has today released an ambitious ten year plan for modernising the tax system,1 capitalising on the opportunities provided by technological advancement. The Low Incomes Tax Reform Group (LITRG) broadly welcomes the direction of travel, but urges HMRC to ensure that no-one is left behind in the move to an ever more digital system.

Victoria Todd, Head of LITRG, said:

“Modernisation of the tax system is welcome and we support this general direction of travel. For example, tax administration legislation dates back to 1970, so it does not sit well with 21st century computerised processes. This is therefore long overdue a review and update.

“Setting out a 10 year plan is helpful, so that people are primed to expect change in the way they interact with HMRC over the medium term.

“HMRC recognise that some people will need more hand-holding than others in adapting to these changes2 and that there will be some who still need to deal with their tax affairs by more traditional means. This acknowledgement is welcome, provided HMRC ensure that those traditional channels remain accessible in practice and not just in theory. We have expressed some concerns over HMRC practice in the past which has made non-digital channels less visible to the public – for example, HMRC failing to include a contact telephone number on correspondence in favour of a website link.”3

Today’s paper also refers to software providers increasingly working with the tax system, noting that this will allow them to offer to taxpayers ‘new and innovative services’.4

Victoria Todd said:

“Use of commercial software might well benefit some organisations. But for those unable to afford premium software, such as the small self-employed, we have concerns. Free software may be available, but it is likely to have much more limited functionality than paid-for versions. This could risk even those who are able to engage digitally being left behind to the extent that they may not benefit from the extra functionality that digital engagement can offer (such as prompting claims for tax relief and so forth). Full access to the tax system should not be based upon affordability of software. We continue to urge HMRC to produce their own free software to help taxpayers comply with their new obligations.

“The plans set out today are bold and ambitious. It is important that HMRC take time to get things right and don’t rush through major changes. We recognise and welcome that HMRC is willing to engage with stakeholders as this plan develops. We very much look forward to working with them to help shape the tax system of tomorrow which ensures the needs of low income, unrepresented taxpayers are fully met .”

Notes for editors

1. HM Revenue & Customs and HM Treasury Corporate report – Building a trusted, modern tax administration system, 21 July 2020

2. For example, through HMRC’s Extra Support Service, ibid, paras 6.1 & 6.2.

3. See for example: LITRG Press release: Tax campaigners’ alarm at HMRC letter to Scottish taxpayers.

4. See today’s report (note 1), section 1.

5. Low Incomes Tax Reform Group

The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998, LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact Chris Young 07900 241 584 cyoung@ciot.org.uk / Out of hours contact: George Crozier, 07740 477 374)

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