Government seeks to make a digital tax system work for all

Paul Aplin believes the tax administration framework consultation is a real opportunity to offer ideas on how to reform the tax system, to make it work better for taxpayers, for tax agents, and for HMRC.

26th Mar 2021
Former Tax & IT Partner
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Among more than two dozen documents released on 23 March - 'Tax Day' as it was dubbed – was a consultation on the tax administration framework. This builds on the ten-year strategy set out last July.

Central to the strategy is a fully digital tax system, with MTD at its heart, combined with a modernised powers and penalty regime. In his foreword to the new consultation, the Financial Secretary to the Treasury, Rt Hon Jesse Norman says that the tax administration framework “plays a critical role in how people experience the tax system and how much trust they place in it”. 

He is absolutely right. Individuals and businesses need to see the tax system delivering something for them, not just for HMRC and it is good to see this principle so clearly stated.

It is worth recalling the key elements of the ten-year strategy. It is built on the extension of MTD; making better use of real-time information; facilitating timely payment of tax; a single digital taxpayer account and improving services for agents. There is a commitment to delivering the plan through open consultation and in stages: evolution, not revolution.

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Replies (8)

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By SteveHa
29th Mar 2021 10:12

Quote:
This is a very wide-ranging consultation and my impression is that government genuinely wants to hear ideas for reforming tax administration and for exploiting technology to improve taxpayers’ experience of the system.

You have a lot more faith in Government and HMRC than I do. They have frequently demonstrated that consultations are no more than lip service to the process, and HMRC's track record on digitisation is hardly stellar.

Before embarking down this route, they should first deliver what they promised years ago, being joined up systems in their IT infrastructure, not just to the point of disparate systems exchanging information, but actually consolidating their systems so that they actually work.

Only when that is done should they look at improving. A new, "from the ground up" approach would, in the longer term, be much more cost effective and much more suitable for purpose.

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By Greenslades
29th Mar 2021 10:51

At present MTD for VAT is a shambles particularly the way that agents are dealt with. It shows HMRC have absolutely no understanding of the needs of taxpayers and their agents and have made life unbearably and unnecessarily complex.
It really is not going to work until they sort this out pronto. Additionally they should not be let loose on other taxes until this is sorted or it will screw up the whole tax collection process when the economy has a real chance of growth.

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By Greenslades
29th Mar 2021 10:51

At present MTD for VAT is a shambles particularly the way that agents are dealt with. It shows HMRC have absolutely no understanding of the needs of taxpayers and their agents and have made life unbearably and unnecessarily complex.
It really is not going to work until they sort this out pronto. Additionally they should not be let loose on other taxes until this is sorted or it will screw up the whole tax collection process when the economy has a real chance of growth.

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By C.Y.Nical
29th Mar 2021 11:02

'my impression is that government genuinely wants to hear ideas for reforming tax administration and for exploiting technology to improve taxpayers’ experience of the system.'
Well that's a first, then.
I stopped responding to consultations some time back, both at the central and local government level. I am sick and tired of consultations always leading to a pre-determined outcome. There are specialists who design consultations to get what their sponsors want. Once you become attuned to this you can see their work in pretty much every consultation that appears. The most egregious example which I know concerns the closure of our two cottage hospitals and their replacement by a single, smaller, less useful unit. The opposition was pretty much 100% but the consultations (two so far) have been so distorted that their results are advanced as evidence to support the unpopular decision.

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By djtax
29th Mar 2021 11:18

Sounds great but we all know that in practice HMRC has a dreadful track record of introducing new IT systems that do not deliver, and after simply ignoring input from consultations. See eg the House of Lords damning report in Oct/Nov 2018 into the then proposed introduction of MTD for VAT. Every recommendation in that report was ignored by HMRC. Utter waste of time for all those who contributed (as I did).

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By North East Accountant
29th Mar 2021 12:23

HMRC consultations are a total waste of time.

ICAEW etc would be better served boycotting them completely and actually going into battle against HMRC fighting for what is best for the small business person, under their public interest mandate.

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Tornado
By Tornado
29th Mar 2021 13:28

Is there any mention of changing the one thing that makes MTD and other grand plans look like huge jokes - the tax year end of 5th April!
Change that and I might be more interested in the rest.

The long term answer is simple, develop and improve the existing excellent Self-Assessment system and if the Government wants money to come in a bit quicker then switch to quarterly payments on account.

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Morph
By kevinringer
29th Mar 2021 13:38

I'm all in favour of a digital tax administration system - but has nothing to do with MTD. I'm talking about agents having the ability to administer (self-serve) clients digitally. Image: change a client's residential address in our chosen third party software and the change automatically flows through to HMRC. Or the ability to log into our agent portal and change a client tax code. Or the ability to register a client for SA and at the end of the process the UTR is displayed on screen. Or add partners to partnerships (currently we need to submit paper forms SA401 and VAT2). We used to be able to digitally register a partner for SA but that functionality was removed from agents about 4 years ago. Better still, give agents direct access to the PTA and BTA. Way back in February 2012 HMRC announced they would launch the Agent Dashboard in April 2012 that would give us much of the above functionality. But as with so much HMRC, it was all hot air. Here we are 9 years later and HMRC have actually done thing, other than announce a 10-year plan. If the 2 months' notice we were given 9 years ago has still not materialised, there's no hope for the 10-year plan happing. And there's something else. HMRC announced the better use of information way back in 2016. 5 years later, nothing has been achieved so that too is pushed forward into another 10-year plan. Why is it HMRC can produce all this hot air and get away with it? Why don't the PBs take them to task?

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