On Tax Administration and Maintenance Day, 27 April 2023, the UK government published various documents for consultation, including a new and intriguing consultation on a radical change to the way new legislation is tested before being formally approved.
Creating innovative change through new legislative pilots proposes enabling HMRC to test new policies or processes by making them available in a temporary online environment to a discrete group of taxpayers (or, presumably, agents). The document suggests that the new piloting approach would go beyond a ‘sandbox’ model and could include ‘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’.
HMRC notes that the new approach could bring forward new solutions to existing policy challenges, potentially with multiple pilots running at the same time across different groups. Several obvious pitfalls will need to be avoided where, for example, taxpayers participating in pilots are not representative of the wider taxpayer population and where those within a pilot are subject to different tax rules from everyone else. The consultation also notes that ‘intermediaries may face challenges in supporting customers who take part in a pilot and experience different processes’.
HMRC’s aims here appear to be twofold: (1) to garner taxpayer/agent insight to develop better, more practical legislation, and (2) to foster adoption and engagement (along the lines that those who were involved in the development of the policy are more likely to welcome its introduction).
The consultation closes on 20 July 2023 and HMRC invites thoughts on the potential pros and cons and, crucially, safeguards that would need to be incorporated in the operation of pilots.
On Tax Administration and Maintenance Day, 27 April 2023, the UK government published various documents for consultation, including a new and intriguing consultation on a radical change to the way new legislation is tested before being formally approved.
Creating innovative change through new legislative pilots proposes enabling HMRC to test new policies or processes by making them available in a temporary online environment to a discrete group of taxpayers (or, presumably, agents). The document suggests that the new piloting approach would go beyond a ‘sandbox’ model and could include ‘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’.
HMRC notes that the new approach could bring forward new solutions to existing policy challenges, potentially with multiple pilots running at the same time across different groups. Several obvious pitfalls will need to be avoided where, for example, taxpayers participating in pilots are not representative of the wider taxpayer population and where those within a pilot are subject to different tax rules from everyone else. The consultation also notes that ‘intermediaries may face challenges in supporting customers who take part in a pilot and experience different processes’.
HMRC’s aims here appear to be twofold: (1) to garner taxpayer/agent insight to develop better, more practical legislation, and (2) to foster adoption and engagement (along the lines that those who were involved in the development of the policy are more likely to welcome its introduction).
The consultation closes on 20 July 2023 and HMRC invites thoughts on the potential pros and cons and, crucially, safeguards that would need to be incorporated in the operation of pilots.
