Tax system costs billions in administration, says NAO

With the cost to HMRC of running the tax system increasing there is scope for increased efficiency and productivity according to a National Audit Office (NAO) report.

According to the NAO:

• HMRC’s costs of administering the tax system increased by 15% (£563m) in real terms between 2019/20 and 2023/24 with tax revenue rising at a similar rate. The rising cost is attributable to the increasing complexity in the different tax regimes rising taxpayer numbers the additional cost of introducing and remediating digital systems and the need for a more highly-skilled workforce;
• the tax system is imposing increased administrative burdens on taxpayers and their intermediaries despite the availability of digital channels. The estimated annual cost on businesses to comply with the tax system is £15.4bn – but this is likely to be an understatement and there is no equivalent estimate for individuals;...