The Office for Tax Simplification (OTS) has published 'Third-party data reporting review - call for evidence'. It wants to hear from individuals, their agents and potential third-party data providers about how tax can be made easier through the better use of third-party data.
A number of points will be considered by the OTS, including how HMRC might use third-party data as well as the principles that should apply in relation to third-party data and taxpayers generally.
The review is not considering the provision of new types of information, but the use of information that is already provided to HMRC in some form, either by individuals or third parties, including:
- Bank and building society interest.
- Dividends of UK companies and distributions from authorised unit trusts.
- Distributions from UK and overseas open-ended investment companies.
- Pension contributions.
- Gift aid payments to charities.
- Data from investment and wealth managers, including information about chargeable gains, excess reportable income, interest, dividends and equalisation payments.
- Insurance bond chargeable events.
- Royalties.
One example given is that instead of individuals having to provide to HMRC details of potentially taxable income and gains on their investments, whether such information could be uploaded by their investment or wealth management company and reflected in their online tax account or Self Assessment return.
Responses are invited to
Questions (individuals and their agents)
1. What sources of third-party data do you currently use in order to complete a return, claim a relief or otherwise engage with HMRC (for example, bank statements)?
2. Are there any areas where the provision of third-party data currently creates issues with the accuracy or timeliness of your return, for example, due to delays in receiving the data?
3. To what extent do you think that it would be simpler for you if third parties submitted data directly to HMRC (as well as to you)?
4. What would you consider to be the main benefits of third parties providing such data to HMRC on your behalf?
5. What, if any, are your main concerns about third parties providing data to HMRC on your behalf?
6. Is there any information currently held by HMRC or other government departments that it would be useful to have shown in your online tax account or prepopulated in a tax return?
7. Which types of third party would you find it most helpful to be required to provide data to HMRC on your behalf (for example, banks, investment managers etc)?
8. Are there any particular types of third-party data that it would be useful, with your approval, to have the option of being submitted to HMRC on your behalf (such as rental income from an agent managing a property for you)?
9. If third parties were to provide data to HMRC on your behalf, what would you want HMRC to do with it to make life easier for you, for example, reflecting it in an online tax account?
10. To facilitate a third party providing HMRC with data in an effective way, you may need to provide them with identification information (National Insurance number). How would you expect to provide this information for example, by letter, phone or an online form? Are there some types of third parties that you would be more comfortable providing this extra information to and what are your reasons for this?
11. What do you think would be the most effective way for you to be able to query the accuracy of the data provided to HMRC by third parties? Are there particular taxpayer safeguards you think should be considered to maintain trust?
12. Do you have any comments on steps HMRC could take to build and maintain trust in the way it handles and uses customer data from third parties?
13. Are you aware of examples of approaches to the use of third-party data by other tax authorities that should be considered by HMRC?
A further fifteen questions are addressed to potential third-party data providers.
The OTS welcomes responses to all or any of the questions, as well as any general or specific comments on the areas covered by the review.
External link
Consultation: Making tax easier through smarter use of third party data
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