Plea for new tax rules to fit with digital systems
The Association of Taxation Technicians (ATT) is calling for tax policies and legislation to develop in parallel with any new digital systems (or necessary changes to existing digital systems) to avoid placing more burdens on, or adding to the frustrations of, taxpayers.
The call comes in the ATT’s response to an HMRC consultation on the tax administration framework. In this consultation, the Government seeks comments on the legislation which forms the tax administration framework as part of a longer term strategy to ‘build a trusted modern tax administration system’. The current legislation is a patchwork with some elements of current legislation dating back to 1970. While HMRC operations need to be underpinned by comprehensive legislation, what people engage with directly is not the legislation itself but HMRC’s systems and processes, says the ATT. It is the quality of these engagements that drive trust and a sense of the modernity of the system, adds the ATT.
The ATT response highlights the importance of developing tax policy jointly with digital teams who understand what can, and cannot, be achieved with the existing digital systems, or what developments can be practically and cost-effectively be added on.
Jon Stride, Co-chair of ATT’s Technical Steering Group, said:
“We know that HMRC can achieve impressive results when policy and digital teams are in the same room at the same time. The rapid development of the various COVID-19 support schemes is an excellent example of how policy and processes can work together. This approach where not just the what the policy should do, but how it will be implemented is considered from the start would be hugely helpful for all new tax policies.
“In contrast to the success of the COVID-19 support schemes, policies such as the new reporting requirements for UK residents disposing of UK residential property were developed before it was realised that a new, standalone digital system was required. We have received almost universal negative feedback from members about the new system, which has caused serious issues when it comes to interacting with the existing self-assessment system. If more thought had been given to how the policy was to be implemented in practice earlier on, many of these issues could have been avoided.”