M Revenues & Customs has been having a hard time of late and has received justified criticism from customers, accountants and the National Audit Office for providing what is often seen as an inadequate and inefficient service. The good news is HMRC has taken the criticism on the chin, and has vowed to do things better from now on. To this end, it has just released a statement which outlines 3 key changes it intends to introduce before the end of the current Parliament in 2020.
So what exactly is this plan, and what key changes are business accountants likely to see over the coming years? Well, HM Revenue and Customs (HMRC) has updated its single departmental plan to refocus on what it views as the 3 key objectives for the period 2016-2020: a clampdown on tax planning, transforming services for taxpayers and delivering a more professional, and efficient organisation.
In terms of its focus on tax planning, HMRC’s updated report says:
“Over this Parliament we will maximise revenues due and bear down on tax avoidance, tax evasion and other non-compliance through well-designed tax policy, a transformed compliance strategy and effective delivery through digital channels.”
HMRC has also confirmed it is looking to raise a further £5bn a year by 2019-20 by “tackling tax avoidance and tax planning, evasion and compliance, and by addressing imbalances in the tax system”.
In terms of tax services, the department says it is working to transform tax and payments for its customers via its new personalised digital tax accounts. It is hoped that by the end of the Parliament, by making it easier for customers to pay the correct levels of tax, these digital accounts will recoup an additional £1bn of additional tax revenue.
In terms compliance, HMRC is looking to take a tougher stance and aim to increase the number of criminal prosecutions to 100+ a year by 2020. The department also says it will work harder to improve its customer service record, after being heavily criticised in a recent report from the National Audit Office (NAO), which stated that HMRC’s service ‘collapsed’ between 2014-15 because of staff shortages.
In response HMRC’s updated departmental plan states that the organisation will engage its staff by
“ensuring they are valued for their skills, knowledge and expertise and that they have the right tools to do their job and deliver outcomes”.
Speaking about the new proposals an HMRC spokesperson said:
“There is no change to the normal, everyday use of tax reliefs as intended by Parliament.”
“Tax reliefs are in place to encourage certain actions, such as building up a pension pot, investing in your business or saving for a rainy day and that is overwhelmingly how they work. But, when reliefs are manipulated in a way the law does not intend, to achieve an unfair tax advantage it is only right that HMRC steps in on behalf of the vast majority of taxpayers who play by the rules.”