Report shows declining trust in HMRC

A new report has highlighted not only a declining trust in HMRC, but a growing cost of tax administration too, for both HMRC and taxpayers alike.

Responding to the Parliament’s Public Accounts Committee (PAC) report, the Chartered Institute of Taxation (CIOT) believes that investing in HMRC’s customer service can help to improve trust.

The CIOT has also welcomed a call in the report for HMRC to learn lessons from its implementation of Making Tax Digital so far and put the needs of taxpayers at the heart of plans to improve digital services.

CIOT Director of Public Policy, Ellen Milner, commented, “Improving service levels is central to rebuilding trust in HMRC. Taxpayers trying to comply with their obligations need to be able to get answers to their questions and registrations and refunds need to be processed quickly.

“Until these problems are properly addressed, we will continue to see an impact on the tax system as a whole, the ability to do business and the wider economy.”

Ellen Milner added, “We support digitalisation of the tax system, but it has to work for taxpayers as well as for HMRC.

“As the PAC observes, in its early stages, Making Tax Digital (MTD) was imposed on businesses without adequate consultation. The forthcoming Digital Transformation Roadmap provides a golden opportunity to plan out how HMRC arrives at a ‘digital first’ destination, but to be fully effective, the roadmap needs to be co-created with stakeholders, learning lessons from the implementation of MTD.

“Future testing of new systems needs to be more extensive and robust than it has been to date.

“The government’s three priorities for HMRC are to improve customer service, close the tax gap and modernise and reform the tax system. All three require effective processes and continual investment.

“The upcoming Spending Review needs to provide the resources needed for HMRC to replace its legacy IT systems, as well as continuing to support taxpayers who need to contact them through traditional routes.”

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