HMRC has published an issue briefing giving an overview of its approach to tax compliance. The paper Ensuring the correct tax is paid highlights a number of points:
the tax system itself is the most effective way to ensure the ‘right tax’ is paid, preventing ‘non-compliance before it can occur, while making things easier for taxpayers and allowing HMRC to focus our resources where they can make the most difference’;
early intervention by HMRC minimises errors, for example prompts in the self-assessment system and pre-population of online forms;
decisions on when to intervene are determined by risk, based on ‘cutting-edge data analysis’, and are targeted and proportionate; and
regarding tax planning, the paper notes ‘while we don’t have a problem with tax planning that is within the intent of the legislation, we won’t hesitate to act against contrived arrangements that seek to artificially minimise tax liabilities, whether it’s multinationals diverting profits out of the UK or tax avoidance schemes used by individuals’.
The paper includes brief commentary on how HMRC ‘is transforming its approach’. ‘We can’t solve today’s problems with yesterday’s solutions, so HMRC and the government are always exploring modern, innovative responses. As well as developing new solutions, HMRC will continue to consider how best to use our resources to address these new challenges over the coming years.’
It adds that ‘we want to be more open about the challenges we face as a tax authority, and the options that are available to us all. We want to do more to work with and consult our customers and stakeholders, so we can design a tax system that’s fit for the future together.’
The paper also notes the way HMRC has prioritised efforts to support ‘legitimate businesses and individuals’ during coronavirus as an example of how it tailors its approach to different groups of taxpayers. In recognition of how it adapted to the crisis, HMRC won the ‘outstanding contribution to tax in 2019/20’ prize in this year’s Tolley’s Taxation Awards.
HMRC has published an issue briefing giving an overview of its approach to tax compliance. The paper Ensuring the correct tax is paid highlights a number of points:
the tax system itself is the most effective way to ensure the ‘right tax’ is paid, preventing ‘non-compliance before it can occur, while making things easier for taxpayers and allowing HMRC to focus our resources where they can make the most difference’;
early intervention by HMRC minimises errors, for example prompts in the self-assessment system and pre-population of online forms;
decisions on when to intervene are determined by risk, based on ‘cutting-edge data analysis’, and are targeted and proportionate; and
regarding tax planning, the paper notes ‘while we don’t have a problem with tax planning that is within the intent of the legislation, we won’t hesitate to act against contrived arrangements that seek to artificially minimise tax liabilities, whether it’s multinationals diverting profits out of the UK or tax avoidance schemes used by individuals’.
The paper includes brief commentary on how HMRC ‘is transforming its approach’. ‘We can’t solve today’s problems with yesterday’s solutions, so HMRC and the government are always exploring modern, innovative responses. As well as developing new solutions, HMRC will continue to consider how best to use our resources to address these new challenges over the coming years.’
It adds that ‘we want to be more open about the challenges we face as a tax authority, and the options that are available to us all. We want to do more to work with and consult our customers and stakeholders, so we can design a tax system that’s fit for the future together.’
The paper also notes the way HMRC has prioritised efforts to support ‘legitimate businesses and individuals’ during coronavirus as an example of how it tailors its approach to different groups of taxpayers. In recognition of how it adapted to the crisis, HMRC won the ‘outstanding contribution to tax in 2019/20’ prize in this year’s Tolley’s Taxation Awards.
