HMRC update on prioritising change due to Brexit
02 May 2018
HMRC shared with stakeholders, via email, details of the work it has been doing to prioritise change within the department to enable it to deliver new priorities (in particular EU Exit) while keeping on track with its ambition to become the world’s most digitally advanced tax authority.
The full detail of the communication from HMRC can be read here, but we have summarised it below and drawn out what changes may impact payroll.
EU Exit
- In 2015, HMRC secured £1.3 billion from the government to transform the way it worked and said its goal was to become the world’s most digitally-advanced tax authority
- In 2016, the EU referendum result heralded potentially major changes in HMRC’s customs, tax, tax credit and child benefit work. This means delivering essential programmes to support access to European markets and boost free trade with countries across the world. Many of these will be delivered through sophisticated digital systems
- At the end of 2017, HMRC had 15 major programmes and more than 260 projects running so had to take a step back and look carefully at what it could, and should, deliver in light of challenges
- HMRC has prioritised the projects that make the most difference – pausing some work and stopping other projects to make room for the EU Exit work; however, although the journey will be slower it doesn’t change the overall ambition to become the world’s most digitally-advanced tax authority
- Plans have been delayed to introduce further digital services for individuals. Progress on simple assessment and real-time tax code changes have been halted
- HMRC will continue to encourage more customers to use their Personal Tax Accounts and will focus on improving the existing service. Additional services will be added only where they reduce phone and post contact or deliver significant savings
- Work is to be paused to digitise services that impact fewer numbers of customers, such as those paying Inheritance Tax, or applying for Tax-Advantaged Venture Capital Schemes and PAYE settlement agreements
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CIPP comment Enduring agreements for PAYE settlement agreements (PSA) came in from April 2018, however, the further changes that were in the pipeline to allow PSA applications to be processed electronically without the need for agreement will now go on the back burner. |
- As confirmed last July, HMRC will not mandate any further MTD for Business changes before 2020, at the earliest
- The prioritisation work means the convergence of business taxes from the current range of IT systems onto a single system will now happen at a slower pace. This will slow the creation of the single account for all business customers
- Improvements to the tools and processes that HMRC compliance teams use to identify, work and resolve compliance risks will now be delivered over five years, instead of three
HMRC is to continue to deliver all of the additional work given in Budgets and Autumn statements for which funding was given. This includes the Soft Drinks Industry Levy; the Trust Registration Service; work to tackle avoidance schemes that seek to exploit tax and National Insurance Contribution advantages through Disguised Remuneration and Salary Sacrifice arrangements, and work tackling non-compliant overseas suppliers who sell goods to UK customers.
Final details will depend on the on the confirmation of the Department’s 2018-19 budget settlement.
Some of these areas were also discussed by Jon Thompson (Permanent Secretary at HMRC) and Jim Harra (Second Permanent Secretary at HMRC) at a recent Public Accounts Committee hearing.