ATT unconvinced by HMRC’s piloting proposals

The proposed approach involves suspending the usual tax rules for short periods of time for small groups of taxpayers, who are instead asked to follow different rules from the rest of the population in order to test new policies and procedures.

Responding to a discussion document from HMRC,¹ the ATT has called for HMRC to look at other aspects of testing and developing policy, such as spending more time on policy design, and providing more support to those who find themselves excluded from new systems and processes.

Jon Stride, Vice Chair of the ATT Technical Steering Group, said:

“It is important that HMRC has the ability to fully test new systems and processes in order to produce a tax system which is effective and efficient for taxpayers, their agents and HMRC. The systems developed to implement a number of recent policy changes² have caused problems for all three groups.

“One way in which we think this approach could be more usefully implemented is to protect those who cannot immediately access HMRC systems on launch. A number of new digital services have had teething issues making it difficult, and sometimes impossible, for some groups of taxpayers to access services they need to use. Instead of changing the rules for small groups of people to test policy ideas, we think that HMRC needs more powers to create exemptions or exclusions to protect those who can’t immediately access new systems or processes.”

The ATT also has concerns about the potential costs in time and money for taxpayers who find themselves part of a pilot.

Jon Stride continued:

“If the proposals are introduced, we consider that participation should be voluntary and that participants (and their advisers) should be compensated for any costs incurred as a result of being in a pilot. No one in a pilot should end up at a disadvantage compared to taxpayers outside of the pilot in terms of time, monetary costs and tax incurred.

“If the pilots are made compulsory, then we would also like to see permitted opt outs, similar to those available for jury service, and financial compensation for any additional costs incurred so that taxpayers are not left out of pocket after helping HMRC.”

Notes for editors

1. ATT response to HMRC document.

2. Taxpayers and their agents have experienced problems with, for example, the new VAT registration service, the CGT on UK Property Service, the Trust Registration Service, the introduction of the agent-client digital handshake and MTD for VAT.