HMRC reprioritisation: Simple Assessment and Dynamic Coding paused

HMRC are in the middle of a large transformation project, including the roll out of digital services and the launch of new regional centres.  However, in light of the extra challenges posed by Brexit, HMRC have had to take a step back and look carefully at what they could, and should, prioritise.

Following this exercise, HMRC have announced that a number of projects will be paused or stopped to make room for Brexit work.  This reprioritisation was discussed at a Public Accounts Committee hearing on 30 April, and later confirmed in an email to representatives of ATT and other professional bodies.

Individuals

HMRC have confirmed they will delay plans to introduce further digital services for individuals, in particular halting progress on:

  • Simple Assessment
  • Real time tax code changes
  • Digitising services for inheritance tax, tax advantaged venture capital schemes and PAYE Settlement Agreements (PSAs).

We understand that those taxpayers already in Simple Assessment will remain there, but no further taxpayers will be brought in for the time being.

HMRC will continue to encourage use of Personal Tax Accounts.  They also believe that the work done to date on Making Tax Digital (MTD) for Individuals has laid foundations to revisit in relation to Simple Assessment and real time coding in the future.

As no new tax credits claims will be made after January 2019, HMRC have indicated they won’t move ahead with an online service for new tax credits claims. Instead they will focus on improving the existing Tax Free Childcare system. Changes to the Child Benefit system will also be limited to the underlying IT infrastructure.

Business

HMRC indicate that they remain on track to mandate MTD for VAT from April 2019.  They also reconfirm that they will not mandate any further MTD requirements before 2020 at the earliest.

The reprioritisation work means that moving business taxes from the current range of HMRC income tax systems onto a single system will now happen at a slower pace.  This will slow the creation of a single account for business customers.  HMRC stress that this remains their ultimate aim however, and does not impact on the delivery of MTD.

Compliance

Improvements to the tools and processes that HMRC compliance teams use to identify, work and resolve compliance risks will now be delivered over five years, instead of three.

Ministerial Priorities

HMRC have confirmed they will continue to work on all of the additional announcements made in previous Budgets and Autumn statements for which they have been given funding.

This includes:

  • The Soft Drinks Industry Levy;
  • The Trust Registration Service;
  • Disguised Remuneration and Salary Sacrifice arrangements
  • Work tackling non-compliant overseas suppliers who sell goods to UK customers.

Regional Centres

HMRC’s move to thirteen regional centres will continue, though there will be delay to some aspects.