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Legislative changes will allow HMRC to move to digital by default


Published: 20 Feb 2024 Update History

The government has announced improvements and legislative changes intended to increase the use of HMRC’s online income tax services.
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The government has published a summary of responses to the March 2023 consultation on simplifying and modernising HMRC’s income tax services. This is part of the government’s tax administration framework review

The consultation explored possible changes to income tax administration, including: developing and promoting the use of HMRC’s digital services; PAYE pain points; and a review of HMRC’s criteria for issuing a notice to file a self assessment tax return. 

The government has announced that work will continue in the following areas: 

  • putting taxpayers on the correct PAYE tax code more quickly following a change of circumstances;
  • the development of a digital self-serve tool that will allow taxpayers to view their income tax position and claim or declare income, allowances, benefits, and deductions;
  • improvements to HMRC’s Check if you need to send a self assessment tax return tool;
  • improving and expanding digital registration services for income tax self assessment (ITSA); and
  • continuing to review the criteria HMRC uses to determine who needs to file an ITSA return.  

The government intends to introduce secondary legislation to increase the use of digital channels and reduce phone and post contact. These changes include allowing HMRC to send specified correspondence to taxpayers digitally by default, unless they elect otherwise. It would require taxpayers to provide up to date electronic contact details to HMRC. It would also allow HMRC more flexibility in how it communicates tax code changes to taxpayers. 

Caroline Miskin, Senior Technical Manager ICAEW Tax Faculty said: “HMRC has already announced some changes to the self assessment criteria and stopped sending paper notifications of tax repayments. The improvements to digital services will take time to deliver and need to be working well before paper communications become digital by default. It is disappointing that HMRC has not yet been able to confirm that agents will be given the same access to the new PAYE and self assessment services that are planned for taxpayers”. 

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