Consultation response: Tax Administration Framework Review: New ways to tackle non-compliance

The Consultation considered whether HMRC’s approach to correcting mistakes by large numbers of taxpayers could be improved (Amendment to conditions for making claims). It focuses on the proportionality and efficiency of HMRC’s current correction powers and sought views on their potential modernisation and reform (Reform of Revenue Correction Notice (RCN) conditions and  Introduction of a partial enquiry) as well as the potential for a new power (Requirement for taxpayers to self correct).

In our response, we commented on each of these four proposals:

Amendment to conditions for making claims
The ATT support the submission of additional upfront information for some reliefs and allowances, as this could help HMRC make better judgements when claims are received and payments can be processed and paid more promptly and with certainty. 
 

Reform of Revenue Correction Notice (RCN) conditions
The ATT agree that greater alignment of RCN conditions across all taxes could make them simpler and easier for HMRC to administer, and for taxpayers to understand and comply with their obligations. Requiring HMRC to provide details of why a RCN is being issued could improve taxpayer understanding of the rationale for the correction and could promote transparency and openness - leading to greater trust in the tax system. 
 

Introduction of a partial enquiry
The ATT does not support the introduction of a partial enquiry process. We consider that there are already adequate statutory provisions for enquiring into an aspect of a return or claim, and that creating more unnecessary legal powers undermines the drive to simplify the tax code. 
 

Requirement for taxpayers to self correct
The ATT consider that the requirement for taxpayers to self correct could, provide a ‘lighter touch’ for correcting error or mistakes that HMRC are aware of from its data collection and interrogation, especially where the evidence is clear and unambiguous, thus providing a quick, efficient, less intrusive and cost effective alternative to a full statutory enquiry.  

We also reiterated our comment that after the review of the administrative framework had taken place, that we should now retire the Taxes Management Act 1970 and consolidate all administrative legislation across all taxes into one ‘fit for purpose’ management taxes act which would simplify and consolidate the tax code, as well as help taxpayers find the information, they need in one easy and accessible place.