HMRC have published their responses to their March 2021 Call for Evidence ‘The tax administration framework: supporting a 21st century tax system’.
The Call for evidence sought views on how the legislation, processes and guidance underpinning HMRC’s administration of the tax system could be reformed and updated as part of the Government’s 10-year tax administration strategy, ‘Building a trusted, modern tax administration system’. The overall aim is to provide a better experience for individuals and businesses, enable opportunities to further reduce the tax gap, and help build resilience and responsiveness to future crises.
Some respondents to the consultation highlighted disparities in treatment between different taxpayers and called for reassurance that HMRC apply a consistent approach to all taxpayers.
Many respondents were supportive of:
- Simplification and reduced administrative burdens for all taxpayers, with a consistent approach where this benefits taxpayers.
- Greater transparency from HMRC and use of discretion which is key to building trust.
- Greater clarity and certainty from both legislation and guidance as current complexities undermine trust.
- Use of the tax administration framework to support digital reform whilst supporting those who have problems using digital technology.
- Proportionate sanctions for non-compliance with support for those who try to get things right and tougher sanctions for those who are deliberately or repeatedly non-compliant.
Respondents felt that any reforms should be introduced carefully and gradually with agents playing a key role.
No specific recommendations have yet been made by the government as a result of this review. HMRC have said only that they will “consider how best to develop, prioritise and sequence proposals for changes to the framework” and “develop a roadmap for future consultation and analysis”. However, as a result of the review progress is being made in several areas including:
- A new Call for evidence on Income Tax Self Assessment registration for the self-employed and landlords.
- Further work on the use of third-party data and pre-population of data.
- Reform of Basis periods for Income Tax.
- A new Consultation on the Alcohol duty system includes objectives common to the Tax Administration Framework Review in setting out proposals for a simpler administrative regime that reduces burdens on producers.
- Action to improve tax administration for large businesses, which complements this wider review.
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