Digital progress but not at the cost of service standards, warns Tax Institute

The Chartered Institute of Taxation (CIOT) has warned that HMRC’s customer service standards, which have recently been heavily criticised, must not be allowed to decline further as HMRC seeks to transform itself into one of the most digitally advanced tax administrations in the world.

The Chancellor has today announced that there will be a headline 21% reduction1 in baseline resource costs at HMRC delivered through digitalisation of tax collection and a smaller but more highly skilled workforce.

CIOT President Chris Jones commented:

“We support moves to digitalise the UK tax system but the Government should not count their savings before they’ve been realised.

“The ‘Making Tax Digital’ project is an ambitious programme which has the potential to deliver significant benefits to both taxpayers and HMRC, but it must be managed carefully and in consultation with taxpayers, tax professionals and software developers alike.   It will be vital to ensure that the tax system itself can support the changes proposed and is fit for purpose in the digital age.  Provision must be made for taxpayers who are not digitally engaged.

“HMRC, which is struggling to meet its public-facing service targets, has announced that it is about to lose many staff and close its local offices.  A worry with this latest announcement about ‘Making Tax Digital’ is that in reality actual progress on transforming the tax system may lag behind HMRC’s ambitious targets.  We do not want to see further cuts in resources being made at HMRC before the full cost-savings that digitalisation promises are being delivered.

“HMRC say that ‘Making Tax Digital’ will eventually mean that most businesses will be required to update HMRC quarterly via their digital tax accounts.  This sounds like it could create a lot of extra work for businesses and their advisers, and we are struggling to reconcile this with the announcement by the Chancellor today that the annual cost to business of tax administration will be reduced by £400m by 2019/20.  This is another reason why HMRC must consult widely on these proposals before they are introduced to ensure that the final product is fit for purpose”.

Notes to Editors:

  1. This figure is taken from HMRC press release – HMRC’s Settlement at the Spending Review 2015 –
  2. The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 17,500 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification