Simplifying and modernising HMRC's Income Tax services through the tax administration framework
Executive summary
- AAT acknowledges that a digital by default approach is a sound principle. The provision of easy to access digital services, like the proposed digital forms, will help achieve the aim of delivering more efficient services for taxpayers.
- However, the core risk behind these reforms is the customer-facing element not being supported end to end. HMRC continue to digitise when the current digital services are not yet in an acceptable position. AAT members have regularly voiced their frustrations in dealing with a mixture of digital and paper communications and the declining customer service levels provided by HMRC.
- HMRC should focus on getting the current system working acceptably first. This includes properly resourced customer services and guidance. If this is not delivered, the administrative benefits of digitisation will be lost.
- The digitally excluded must be better supported with a new digital by default approach. For example, those who are neurodiverse will struggle to read larger volumes of documentation and would be better served by calling a helpline to advise them on what to do. However, HMRC’s telephone helplines and customer service is not at an acceptable level for this to be possible.
- Digitisation does not always equate to simplification. There are increasing signs that efforts to improve tax simplification centre almost exclusively on digitising the system. It must also be accompanied with changes to the administration of tax and simpler rules and clearer guidance.
- HMRC could look to partner with employers and third parties to offer improved education and guidance for taxpayers detailing the benefits of a digital account. This could explain benefits like the ability to receive automated repayments quickly.
- HMRC should also consider how improving the professional standards of accountants and tax advisors could benefit ITSA returns. A compulsory requirement for all paid-for accountants and tax advisors to reduce the occurrence of unnecessary Self Assessment returns as well as fraud and error.
Related consultation responses
Expanding the cash basis for the self-employed
AAT is not convinced the proposal will do much to encourage businesses to switch to the cash basis. There is ultimately not enough of a financial incentive.
Property income review: call for evidence
While we appreciate that a single tax regime for all types of lettings would be simpler, it seems reasonable that different tax regimes should apply to each.
