Will tax simplification still be needed as technology advances?

27 February 2019


The Office of Tax Simplification (OTS) has published a discussion paper on the implications of using technology to simplify tax. It looks broadly at the challenges, as well as the opportunities, that emerging technologies pose.


The OTS is the independent adviser to government on simplifying the UK tax system, to:

  • make it easier for the taxpayer;
  • improve the experience of all who interact with the tax system; and
  • to reduce the administrative burden for all.

Technology is already being used by individuals and their agents to facilitate online completion of tax returns through HMRC’s programme of digitisation, Making Tax Digital. However, while technology can ease the process, it may also create a future risk for taxpayers, as easier completion will not remove the need for individuals and businesses to understand and comply with their tax obligations.


If software and technological advances reduce taxpayers’ understanding of how much tax they should pay and why, this could cause problems, for example, when things go wrong. The OTS’s paper explores what can be done to empower taxpayers to sufficiently understand their tax, and their obligations, while benefiting from advances in technology.


The report suggests the following key points for the government to consider:


  • HMRC expanding the current personal tax account to deliver better targeted guidance alongside looking at automatically enrolling all taxpayers into this service

  • How to mitigate the risk of taxpayers losing sight of their obligations through the use of technology

  • Continuing to monitor private sector technological innovation with the potential to improve taxpayers’ experience of managing their tax affairs

  • The potential for using new technology to engage with the public more efficiently and effectively while saving resources

  • Monitoring the impact of the General Data Protection Regulation on taxpayer choices for security and privacy, and convenience

  • Active monitoring of the impact of moves towards a cashless society and risks of digital exclusion


Read the full discussion paper ‘Technology Review: a vision for tax simplicity.