Income Tax Self Assessment Call for Evidence response

21 July 2022

Last year, Her Majesty’s Revenue and Customs (HMRC) released a Call for Evidence asking for feedback into proposed changes to the Income Tax Self Assessment (ITSA) registration deadline. The proposal sought to bring forward the registration date for ITSA.  The government wants tax to be “straightforward, easy to get right and hard to get wrong.”

The Call for Evidence response, published on legislation day (20 July 2022), details the feedback HMRC received from stakeholders.

Many respondents agreed with the challenges presented, such as:

  • taxpayers don’t identify and understand the need to register
  • taxpayers assume HMRC already knows about them
  • HMRC makes insufficient use of third-party information, nudges and prompts
  • taxpayers don’t always know whether they are trading or when they started or stopped trading.

However, there was very little indication that moving the dates would assist in resolving these issues. Instead, respondents agreed that awareness of the registration process though publicity, education and process improvements would be more beneficial than policy changes.

Another suggestion pointed towards HMRC better using the data it holds and expanding the data requested through ITSA.

Other suggestions included:

  • reviewing the obligation for ITSA taxpayers to notify HMRC of a tax liability and considering whether it could be merged with the more familiar deadline for obligations around 31 January
  • a review of the circumstances in which HMRC requires taxpayers to make and file a self-assessment tax return
  • better communication of the current deadlines and opportunities to look for innovative ways to educate new and potential future taxpayers
  • enabling taxpayers to make themselves known to HMRC sooner to access products, services and guidance in a process that is separate from registering for ITSA.

Therefore, HMRC has no plans to make amendments to the ITSA registration deadlines and is keen to explore new ideas.

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