“ICAS has published its report Tomorrow’s Tax Administration.”
Good tax administration is essential, even though it may not feature at the top of many political wish lists. It has a role to play in fulfilling the UK Government’s ambition for an open, business-friendly economy post-Brexit. If society as a whole does not trust the tax system because it does not function properly, voluntary compliance is undermined and the consequences for government revenues are serious.
The Government needs tax administration to work effectively, to deliver the money it needs to pay for COVID recovery and to fund ambitious initiatives around tackling climate change and levelling up. Based on our Members’ experience – working in business, and in practice as agents – a more effective and taxpayer-friendly tax administration should be an urgent priority for the Government.
HMRC’s functions have expanded beyond ‘pure’ tax in recent years but its resources have not kept pace and are insufficient to cover all its responsibilities adequately, even in ‘normal’ times. Events, such as Brexit or the pandemic, rapidly lead to significant problems with service levels. Funding for the digital systems required to modernise the tax system in a way that works for taxpayers has also been inadequate and needs to be increased.
In 2020, the Government published its 10-year strategy for creating a tax system ‘fit for the challenges and opportunities of the 21st century. ICAS is broadly supportive of the three key strands of work that make up the strategy: the extension of Making Tax Digital, exploring tax payment mechanisms and reform of the tax administration framework. However, timely delivery will be critical; this will require the provision of adequate HMRC resources and the funding to build an integrated digital tax infrastructure.
The 10-year strategy is about the future but there is an immediate need to address the poor service levels, patchy digital systems and problems which cause issues for taxpayers and agents on a day-to-day level. Pushing ahead with major, complex projects, like Making Tax Digital, whilst failing to ensure that basic tax administration works properly for everyone who has to engage with it, is unacceptable and will not deliver what the Government or taxpayers need.
We have called for urgent government action to address problems in ten areas of tax administration that are impeding the smooth running of the tax system.
Tomorrow’s Tax Administration: top ten priority areas for action:
- Powers and safeguards – striking the right balance
- Facilitating the work of agents in supporting their clients
- Supporting high standards for all agents
- Swift access to the right HMRC support and expertise
- Meeting the standards set out in the new HMRC Charter
- Making Tax Digital – making it work for businesses
- Personal income tax – roadmap required
- Support and access for the digitally excluded and digitally challenged
- A user-friendly legislative framework
- Tax Simplification”
For more information, contact us at:
+44 7535 6176 81