New consultation: The Tax Administration Framework Review

27 April 2023

The government has launched a new consultation ‘The Tax Administration Framework Review: Creating innovative change through new legislative pilots’. The consultation welcomes views on a proposed legislative approach to piloting. HMRC is exploring how to develop and improve testing prior to wider roll out of change.

A call for evidence on the legislative framework underpinning tax administration was broadcasted on 23 March 2021 and the response was released on 30 November 2021. However, respondents expressed views that HMRC could be more transparent in developing policy and take a more collaborative approach to delivering change. Some stakeholders suggested that HMRC look at ‘sandbox testing’. This is a way used by various organisations already to test and refine new ideas, by piloting them in restricted environments before rolling them out more widely.

As part of the Tax Administration Framework Review, this discussion is the next stage exploring how the possible use of a HMRC sandbox piloting model could achieve change more collaboratively. It seeks views on a bespoke piloting and testing approach which focuses on giving HMRC the legislative ability to gather the evidence needed to make informed, innovative policy changes where needed.

Currently, testing of changes or collaboration with external stakeholders can be limited by legislative inflexibility. The consultation will study the opportunities and challenges of a prospective sandbox testing approach and what safeguards might be necessary and proportionate.

The following points are suggested for discussion:

  • what benefits and challenges do you think piloting potential policy and process changes in this way would bring?
  • what safeguards would you like to see in the operation of pilots conducted within the proposed approach?
  • are there any other ways you would want to engage in the development of new policy, processes, and legislation?
  • what areas of HMRC activity do you think would benefit from this type of approach?
  • what participant support and oversight would you like to see?

HMRC has said:

‘‘HMRC is proposing a new piloting approach which would allow the creation of temporary legislation to suspend the usual tax administration rules for an identified section of the taxpayer population in time-limited pilot schemes. The outcomes would then be evaluated to inform future decisions on adopting the change permanently.

This proposed piloting model would provide opportunities to innovate and develop new tax administration policy and processes. HMRC recognises there may also be some challenges and risks to this approach.

Our approach could support the involvement of intermediaries, agents, taxpayers, and third-party experts. We want to explore where it would be appropriate to randomly select participants or to seek volunteers to ensure an accurate reflection of views and experiences.’’

HMRC are interested to hear from those who have researched or implemented similar approaches to testing change. Your views will help shape proposals to make the tax system simpler and easier to engage with and fit for the future. The CIPP will be responding to various consultations released today, as part of the tax administration and maintenance day (TAMD). If you are interested and want to have a say, please keep an eye out for CIPP roundtable and think tank invites which will be sent to full, fellow and Chartered members.

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