16 December 2024
The Administrative Burdens Advisory Board (ABAB) annual report 2024 is here.
For those who are unaware, ABA supports small businesses in their dealing with HM Revenue and Customs (HMRC) and the tax system. They aim to understand and highlight concerns and issues small businesses have administratively which can have impacts on compliance and the economy. ABAB exists by invitation of HMRC and is a ‘critical friend’
The report comments on three main areas of focus. To assist busy payroll professionals, here are the three priorities, with a short overview of the items discussed:
Priority 1: Modernising and Reforming HMRC
ABAB praised HMRC for early engagement in the building out of Making Tax Digital for Income Tax Self-Assessment (MTD ITSA), enabling changes to be made and improvements implemented at a better pace. They did show concern for the overall awareness of MTD ITSA but feel that the landscape is in a much better position than it has been.
Future looks at the tax system boil down to a concept of Tax Administration 3.0, moving beyond the traditional online processing and putting taxpayers at the centre of the process. The key to any future changes being effective is a receptive ecosystem, involving employers, software providers and HMRC themselves to be open to such reforms.
On the reporting of hours, ABAB shows serious concerns of rationale for collecting the requested data, even going as far as to say this does not fit within their mandate. Postponed until 2026, they also highlighted the threat of implementing such a change at the same time as MTD ITSA and mandating payrolling benefits.
Priority 2: Improving day-to-day performance
As expected, ABAB are concerned over the low satisfaction rates for HMRC’s customer service levels. With HMRC’s desire to move to digital methods of handling queries, it is even more concerning that the webchat satisfaction rates are even further behind the already low telephone levels.
ABAB also pointed towards a recent study conducted by the Chartered Institute of Taxation (CIOT) and the Institute of Accountants in England and Wales (ICAEW).
Priority 3: Closing the tax gap
ABAB has been a voice for payrolling of benefits for a long time, citing the positive impacts it could have on businesses and HMRC. However, they are warning against implementing the currently planned mandating until “at least 18 months following the reporting requirements being published.”
They remain concerned that the soft-landing for loans and accommodation will result in onerous and burdensome end of year calculations and a ‘month 13’ process.
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