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Making Tax Digital Computer says no

HMRC’s ‘digital by default’ strategy

As our ‘wonderful’ tax authority continues with its “digital by default” approach, more and more problems have emerged highlighting a number of fundamental flaws in its approach to move all of its services online. So today I’m looking at which resources should be prioritised by HMRC in rolling out its digital services.

Making Tax Digital: The story so far…

Whether it’s stonewalling MPs’ questions about Making Tax Digital failings or attempting to justify the latest helpline closure, the standard HMRC response has been that the UK tax authority is moving to a “digital by default” approach. This is currently manifesting itself as a headlong dash away from telephone and the physical post to purely online services.

But, unfortunately for HMRC’s cunning plan, their current digital services offerings do not extend to all areas of tax and their functions. Also, they don’t always work for both the accountant and taxpayer users, plus the complexity of tax rules and existing legacy systems means that fixing these problems is a long way from being straightforward.

But help is at hand for our beleaguered tax authority, as a research project amongst accountants has recently been launched to find out what practicing accountants, who use the various HMRC services on offer, think about them.

The survey is specifically asking accountants how they think HMRC should prioritise resources when developing its digital services in order to address the various problems that have emerged thusfar, and also ease some of the Revenue’s well-documented performance issues.

Accountants access to services and information

A major issue, repeatedly highlighted by accountants, is the personal tax account (PTA). This is effectively the taxpayers tax file and is critical for their accountants to access to be able to do their job and hopefully save their clients tax. Regrettably we currently do not have access to all information and digital services in the PTA and are often left in the dark on key pieces of data.

Research released earlier this year, which delved into accountants’ experiences of HMRC’s current digital services stated they “may not sufficiently meet accountants needs to access client data”. The survey also flagged that in order to do their jobs effectively, more than half of all accountants who tried to log in to their client accounts, then had to ask said clients to share screenshots of information in their accounts, because HMRC’s system would not allow us to do so, despite HMRC holding an authorisation.

Which digital services have HMRC effectively blocked?

The Institute of Chartered Accountants have helpfully compiled a list of digital services that enable accountants do their job of assisting their clients that are either currently not available or restricted:

  1. View and check employment pay and tax details
  2. Check and update tax codes (a very limited view-only access is currently provided)
  3. Claim a tax refund (forms R40, P85, P87, various versions of R50, R53, R55)
  4. Check NIC history and state pension forecasts
  5. Track forms submitted online
  6. Submit, check or update marriage allowance claims
  7. Tell HMRC about a change of address
  8. Check or update taxable benefits provided by employers

There are also a number of online digital services which are only available to the taxpayer and not to their accountants. The more important of which are:

  1. Appeals against self-assessment penalties
  2. Making a complaint
  3. Dealing with Tax overpayments and underpayments on form P800 issued by HMRC
  4. PAYE tax calculations
  5. Registering for certain taxes including registering a partnership and partners for self-assessment
  6. Employment-related securities schemes
  7. Reporting of capital gains

What have HMRC said?

HMRC’s response to the ongoing consultation has been to issue a statement saying that it wants to allow accountants to see and do everything their clients can. Great news you might think, unfortunately not, as they go on to say that they are limited in achieving this aim.

The reasons they gave ranged from resourcing issues, difficulties in extracting data from legacy systems (or getting old systems to talk to new ones) to security and regulatory issues such as the fact that only bank signatories can set up or amend direct debit mandates, which is why they say that the new digital time-to-pay services for self-assessment, VAT and employer PAYE are not available to accountants.

Tax Accountant’s view

HMRC’s statement response to the ongoing survey, is like the curate’s egg, good in parts. They do however have ‘previous’ on this issue and once again I can detect the distinct whiff of bovine excrement in the air. For example, whilst their excuse regarding bank access is technically valid, what they fail to mention is that the problem can be cured by an online form completed by the taxpayer with his or her bank.

I have been a practicing accountant for over 30 years and throughout that time have regularly battled with HMRC over their seemingly institutalised reluctance to share any information with an accountant unless it serves their own vested interests and regrettably, I do not expect their attitude to change anytime soon.