Call for Evidence: Tax Administration Framework

HMRC have published a Call for Evidence entitled ‘The tax administration framework:  Supporting a 21st-century tax system’. It seeks views on how the framework might be reformed.

The call for evidence seeks views on how the tax administration framework could be reformed to provide a better experience for individuals and businesses with a view of reducing the tax gap and providing flexibility to adapt.

The tax administration framework refers to all legislation relating to how HMRC collects revenue and makes payments. It covers ways in which HMRC:

• Identifies taxpayers and brings them into the tax system.
• Obtains information from taxpayers to establish their tax liability.
• Calculates the tax that is owed, processes amendments and manages claims and tax relief.
• Checks information is correct through enquiries, information, inspection and discovery powers.
• Collects tax revenue and promotes and incentivises compliance, including through penalties and sanctions.
• Provides safeguards to taxpayers and manages disputes through the appeal and review processes.

This call for evidence is part of a series of documents (including: Call for evidence: Timely Payment) and will be followed by future consultations as HMRC further their 10-year strategy.

This call to evidence will close on 13 July 2021.

A summary of the topics and questions in the Call to Evidence

Reviewing the tax administration framework

• Are there reforms that HMRC should focus on for the framework review? Which changes should we prioritise to drive improvements in the taxpayer experience?
• Where is the tax administration framework creating challenges to the trust that taxpayers place in the tax system and HMRC’s administration of it? How could the framework be reformed to address these challenges?
• Do you agree that the objectives listed are the right overarching objectives to guide this review or do you believe there are others it should consider? Do you feel that some of these objectives are more important than others?
• How could the review ensure the best coverage of viewpoints and expertise from those who depend upon the tax administration framework? Are there particular models of consultation, engagement or collaboration that could work well?
• Are there other international examples or models of tax administration that could inform this review of the UK’s tax administration framework?

Ensuring consistent obligations for people to enter and exit the tax system

• What are the key challenges with the current legislative provisions relating to the identification and registration of taxpayers?
• What benefits of the current legislation should be preserved?
• What likely changes and developments will the framework need to handle? What are the key priorities for framework reform in the area of identification and registration of taxpayers?
• Are the current approaches to the timing of registration still appropriate, or are there opportunities for reform?

Improving the way tax liabilities are calculated and assessed

• What key issues relating to the way a tax liability is established arise within the existing legislative provisions?
• What benefits of the current legislation should be preserved?
• What likely changes and developments will the framework need to handle? What are the key priorities for framework reform in the area of calculating and assessing tax liabilities?
• How could tax return obligations and processes be updated? What should a ‘tax return’ look like in a digital tax system?
• How could HMRC better establish a tax liability in future, to help build trust in a tax system that people see as fair and even-handed?

Using data and information to make tax compliance effortless for the majority

• What key issues do the current legislative provisions relating to the provision and use of data and information present?
• What benefits of the current legislation should be preserved?
• What likely changes and developments will the framework need to handle? What are the key priorities for framework reform in the area of data and information?
• What principles should govern HMRC’s collection, use and onward transmission/sharing of taxpayer data?
• What additional safeguards would be needed for taxpayers and third parties if the role of third parties/intermediaries was expanded?

Tax payments and repayments

• What key issues do the current legislative provisions relating to payments present?
• Are there any particular benefits of the current legislation that should be preserved?
• What benefits could a single/reduced set of payment rules, applied across the taxes, bring?
• What likely changes and developments will the framework need to handle? What are the key priorities for framework reform in relation to payments?

Building in effective methods of verification, sanctions and safeguards to promote compliance

• What key issues do the current legislative provisions relating to powers, sanctions and safeguards present?
• What benefits of the current legislation should be preserved?
• What likely changes and developments will the framework need to handle? What are the key priorities for framework reform to support taxpayers to get their tax right and deter non-compliance?
• What principles should govern HMRC powers, sanctions and safeguards, to build trust in the tax system?
• How should the framework maintain consistency and fairness between taxpayers and groups of taxpayers, while also providing HMRC with appropriate discretion to enable them to take account of individual taxpayers circumstances and wider concepts of fairness?

Further suggestions

• Are there any further suggestions that you have for how the tax administration framework could be reformed?

Useful guides on this topic

Call for evidence: Timely payment
HMRC have opened a new call for evidence about the timely payment of Corporation Tax and Income Tax by small companies. It seeks views on the opportunities and challenges of introducing in-year calculation and payment of these taxes.

External Links

The tax administration framework:  Supporting a 21st-century tax system

Tax administration strategy report