Tax Administration

Tax Administration and Maintenance Day

The government has announced that it will bring forward a further set of tax administration and maintenance announcements on 18 April 2024 at a Tax Administration and Maintenance Day.

HMRC’s debt management capability

The government is investing a further £140m to improve HMRC’s ability to manage tax debts. This will expand HMRC’s debt management capacity to support both individual and business taxpayers out of debt faster and collect tax that is due.

Crypto-Asset Reporting Framework (CARF) and Common Reporting Standard

The government has published a consultation on the UK implementation of the OECD’s global tax transparency framework to provide for the reporting and exchange of information with respect to cryptoassets (known as the Cryptoasset Reporting Framework (CARF)) and amendments to the Common Reporting Standard for the automatic exchange of financial account information between countries (CRS). The consultation closes on 29 May 2024.

On CARF, the government explains that it intends to add the CARF to the list of international arrangements for exchanging information at s349 Finance (No. 2) Act 2023 meaning that HM Treasury will have the power to make regulations to implement reporting obligations for the CARF. The consultation seeks views on such matters, including the scope and definitions used in the OECD CARF, reporting requirements, due diligence and compliance and enforcement.

On the amendments to the CRS, the government explains that it intends to implement the amendments to the CRS that have been proposed by the OECD. The consultation seeks views on optional elements in the UK’s implementation of the amended CRS rules as well as views on two potential amendments to the regulations: introducing a mandatory registration requirement for reporting Financial Institutions and reforming the penalty provisions.

Perhaps most significantly, the consultation also seeks views on extending the reporting obligations of CARF and the CRS to include reporting on UK resident taxpayers by UK institutions. On domestic reporting, the consultation seeks views on the potential benefits and drawbacks of introducing domestic CRS and CARF reporting by including the UK as a reportable jurisdiction.

The government says that the rules will come into force in 2026 at the earliest for exchanges in 2027, and the government will ensure that businesses are given certainty on the scope of the UK’s implementation in sufficient time to prepare.

Non-compliance in the umbrella company market

In June 2023, the government published a consultation on measures to address non-compliance in the umbrella company market. As well as setting out options for regulating umbrella companies, the consultation also considers a number of proposals in relation to tax non-compliance, including potentially transferring any unpaid tax liabilities to other parties in the supply chain.

The Spring Budget 2024 re-enforces the government’s commitment to protecting workers employed by umbrella companies, ensuring fair, genuine competition in the market and preventing significant Exchequer losses caused by tax non-compliance. The government will provide an update on the recent consultation on tackling non-compliance in the umbrella company market at Tax Administration and Maintenance Day. In summer 2024 the government will also publish new guidance to support workers and other businesses who use umbrella companies.

Tax simplification

Despite the abolition of the Office of Tax Simplification, the 2023 Autumn Statement confirmed the government's commitment to tax simplification to support growth and fairness with four main objectives:

• Tax rules should have a clear consistent rationale and be easy to understand.
• The burden of compliance and administration should be proportionate for taxpayers and HMRC and it should be easy for taxpayers to get their tax right.
• Taxpayers should be able to understand their obligations and options particularly at key lifecycle points, such as when they do something for the first time or infrequently.
• Tax policy should not unnecessarily distort the decisions of taxpayers and result in poorly informed choices.

The government also announced that it would measure annual progress against these objectives, focusing on taxpayers' experience and prioritising the impact of complexity on individuals and small businesses. The Spring Budget 2023 provides further details, confirming that the government is announcing metrics to measure progress against tax simplification. These will be drawn from HMRC’s annual customer survey, a survey offered after using HMRC’s telephony or digital services, and will include HMRC’s estimate of the net change in cost to businesses of meeting tax obligations from tax measures.