HMRC trials a 'lighter approach'

HM Revenue & Customs (HMRC) is to trial a 'lighter approach' to tax enquiries by 'exploring simpler and less time-consuming ways of helping taxpayers comply with their responsibilities'.

The new approaches, which aim to cut down on bureaucracy for taxpayers, their agents and the Government, will help inform an ongoing consultation process into modernising the powers of HMRC.

HMRC claims that the new approaches, which will take place at selected locations around the UK, will explore lighter touch approaches to tax enquiries, particularly for those likely to make mistakes in relation to their tax, rather than those who are deliberately trying to pay less tax than is due.

The new approaches include:

• coaching taxpayers through a self audit system, correcting common weaknesses in the preparation of their returns;
  
• discussing perceived risks and, where necessary putting things right in relation to common errors over the telephone; and
  
• providing advice on changes to record-keeping procedures, to correct any existing errors and help avoid future problems.

In any case where HMRC is aware that a tax agent is acting on behalf of a client, copies of any letters will be sent to that agent.

Lighter touch

In many cases, HMRC claims that these new approaches would avoid the need for a full-scale enquiry, which could be expensive and time-consuming.

Doug Tweddle, Director HMRC Local Compliance, said: "The vast majority of the taxes and payments HMRC administers are paid correctly and on time without the need for additional support or compliance action. But HMRC does not take this for granted, and compliance needs to be made as easy as possible.

"With these new approaches we aim to trial a lighter touch, providing help where needed, and freeing up resources to tackle serious and deliberate non-compliance.

"We hope that the new approaches will prove to be more flexible and less time consuming for businesses, tax agents and HMRC staff."

While no decision has been made on the likely roll out of any of the new approaches, the evidence gathered will add to the responses from the recent consultation on HMRC's powers, deterrents and safeguards, and will help to inform future policy.

Details of the interventions being trialled are available in the recent consultation document, Modernising Powers, Deterrents and Safeguards, which is available on the HMRC website.