Building a trusted, modern tax administration system

28 July 2020

At the March 2020 budget, the Chancellor of the Exchequer highlighted the fact that the government’s intention was to create ‘a tax system fit for the challenges and opportunities of the 21st century’.

The importance of this has been demonstrated by challenges incurred due to the COVID-19 pandemic. Although HMRC has overcome the challenges of implementing the employment support schemes currently in place, they have also had to deal with constraints imposed by a tax administration system that needs modernisation.

Lessons can be learned from COVID-19 so that in the event of any future human or natural disasters, the government can offer support as efficiently as possible. HMRC is likely to evolve as an organisation as well as discharging their traditional role as a tax authority. Trust needs to be maintained by both the taxpayer and the wider public for this to be a success.

The document produced by the government, sets out HMRC’s vison for the future of tax administration within the UK, which is designed to improve its resilience, effectiveness and, above all, support for taxpayers. It also has details of a long-term strategy of focused, collaborative and transparent improvements to the tax administration system which has the potential to generate huge benefits, both for individual taxpayers and businesses, and for the collective strength and resilience of the UK as a whole.

The document is broken down into six sections, which cover the following:

  • A vision of resilience and effectiveness

  • The core of a modern tax system

  • The benefits: greater ease of use, productivity and resilience

  • The need for reform

  • A 10-year strategy - 

           Making Tax Digital

           Digitisation: the global norm for modern tax administration

           Making Tax Digital: next steps

           Timely tax payment

           Reform of the tax administration framework

  • Careful and incremental reform

  • Checks and balances

HMRC plans to hold discussions regarding the detailed plans and proposals over the summer. Views are welcomed from everyone with an interest and HMRC will ensure that key stakeholder forums provide the opportunity to debate and shape the way this vision is developed. The government will be working collaboratively and transparently in the period ahead so that proposals can be developed which are effective, imaginative, and ambitious. There will also be dedicated consultation on some elements of these reforms and more detail will be set out at future fiscal events.

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