HMRC Modernisation Plans

Celebrating (sic) its 20^th anniversary, HMRC have just set out the Government’s vision for the future of the UK tax authority:

https://www.gov.uk/government/speeches/exchequer-secretary-to-the-treasury-20-years-of-hmrc-reflections-and-looking-ahead

This keynote speech by James Murray, the Exchequer Secretary to the Treasury, has given us advance warning of what specific modernisation and reform changes to the tax system that we might now expect:

Previous Initiatives further Developed:

• • Adding more functions to HMRC App,

• • Finish roll-out of Making Tax Digital,

• • More use of generative AI on HMRC website, to assist HMRC staff productivity, to identify offshore non-compliance and to improve tax debt collection,

• • The existing ‘whistle blower’ system will reward informants more generously, as a percentage of extra tax collected,

• • Further clamping down on promoters of contrived tax schemes,

• • Further use of advances clearances, prior to submitting R&D Tax Relief claims,

• • Further digitisation via use of voice biometrics to pass security checks faster.

New Initiatives:

• • Introduce e-invoicing for businesses, where invoices are generated and electronically sent in a standard electronic format, so that they can be automatically captured and paid by the customer’s,

• • A dedicated escalation route, to deal with self-assessment and PAYE queries which are over 4 weeks old. A new, dedicated team of experienced technicians and advisers will adopt a ‘once and done’ approach, taking end-to-end ownership of cases and maintaining regular communication with agents,

• • Launching a new PAYE portal, to deal with employee and pensioner taxpayers PAYE tax code issues,

• • Increasing the turnover threshold from £1,000 pa to £3,000 pa for self-employed taxpayers who are required to complete and submit a self-assessment tax return,

• • Tackling ‘phoenixism’, where rogue directors abuse the insolvency regime, to avoid their company paying its taxes. New companies will be required to pay some taxes upfront and directors will be made personally liable for some unpaid company taxes,

• • All tax advisers will be required to follow a new registration & regulation process with HMRC, regulating tax professions for the first time, in similar ways to those practising medicine, law, architecture, etc.

Unsurprisingly, these plans are aimed at reducing the tax gap, reducing tax processing friction and making HMRC more cost efficient. If this means compliant taxpayers pay the minimum correct amount of tax, then there’s nothing objectionable here and, for once, HMRC’s ambitions should be applauded.

Disclaimer - All information in this post was correct at time of writing.