Modernising digital income tax services requires support during any transition, says CIOT and ATT

The CIOT and ATT have responded to HMRC’s consultation Simplifying and modernising HMRC’s income tax services through the tax administration framework, emphasising the importance of providing support for taxpayers and employers during any transition. HMRC’s efforts to move from paper to digital are welcome in principle, but greater trust in HMRC’s IT systems will be required before digital interaction becomes universally accepted. The response sets out some of the main barriers to acceptance.

HMRC’s traditional support channels including telephone and post will need to be properly maintained as part of the transition to digital. The CIOT believes that research should be carried out into why some employers prefer paper communications over digital notifications. Requiring new income tax self-assessment (ITSA) registrations to be made online, with subsequent notices to file and annual tax returns communicated digitally, should only become mandatory when the digital service is operating smoothly without ‘glitches’, it warns.

Along similar lines, the ATT highlights several key points:

• focusing on reducing HMRC’s administrative burden rather than on simplifying the income tax system is a ‘missed opportunity’;
• the proposals may overestimate HMRC’s ability to introduce robust digital services and support taxpayers in the transition to digital; and
• the current ITSA registration criteria and guidance are confusing and the ATT has made recommendations for improvements.