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Can HMRC Ever Be World Class?

Revenue set out strategy for becoming top organisation

HMRC has recently published their corporate strategy to become a “world-class organisation” underpinned by the values of professionalism, integrity, respectfulness and innovation. Still, a long, long way to go then!

The department has three strategic objectives:

1. Maximise revenues and cracking down on avoidance and evasion

Taxpayers are divided by type and size into one of five groups:

– large business
– mid-size business
– small business
– individuals
– wealthy

This enables HMRC to use their systems, processes and services in a more tailored fashion. Criminals fall outside of these groups and are subject to a very different approach. Therefore, we’re interested to see how HMRC may handle topics like IR35 in the future.

Tax compliance will continue to be promoted, and non-compliance prevented as early as possible. Deliberate non-compliance will be dealt with more severely.

Prevention is better than cure, so while cracking down on the minority who break the rules, HMRC are:

– promoting good compliance by designing it into their systems and processes so that taxpayers can get their affairs right from the outset
– preventing non-compliance by using intelligence gathered to enable mistakes to be spotted, prevent fraudulent claims, personalise online services and automate calculations
– responding to non-compliance by identifying and targeting areas of greatest risk and using tough measures to tackle tax cheats

Apparently, HMRC are reducing the likelihood of disputes by helping taxpayers to get their affairs right. Where disputes do arise, however, then these are resolved by agreement or through litigation and by applying the law fairly and even-handedly. If only that were 100% true!

2. Transforming tax

Digital tax accounts and other online services are the main way that HMRC interact with taxpayers, making it convenient for people to see their affairs in one place and help eliminate errors. Direct support however will continue to be provided to those who need it.

HMRC are continuing to look for ways to work with third parties to enable them to collect data, e.g., to populate digital accounts, help collect the right tax, calculate entitlements and ease the burden on taxpayers. That may be true but let us be clear, this is Big Brother, and he is watching you.

Agents are identified as playing a key role in helping people meeting their tax obligations and the use of advisers to represent taxpayers is welcomed by HMRC.

3. Professional, efficient & engaged organisation

The department is moving towards a more highly skilled and sustainable workforce through better training, development and by creating a new, modern network of large regional centres.

HMRC claim they are putting the right people in the right places, doing the right work, with the right skills and using the latest digital tools. Let’s hope they can live up to their word!

Strategic principles

To deliver on HMRC’s vision and guide their future decision making, the department will follow a set of strategic principles for everything they do:

taxpayer-centric: understanding taxpayers through data and insight, so that HMRC can tailor and target their support
simplicity: designing their systems, products and processes around taxpayers, to make it as easy as possible for them to deal with the Revenue
integration: designing a tax system that integrates with third parties and business software
proportionate and even-handed: deployment of resources in a fair and targeted way to ensure no one is out of reach
cost-efficient: using digital services and smart data to work more efficiently, reducing the cost of the tax system.

To ensure HMRC deliver on their strategies, they are holding themselves to account for a series of annually agreed public targets, and are using management information systems to continuously monitor and improve their performance.