Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Accepted
Tax system complexity drives evasion, errors, increased costs, and greater customer contact.
Conclusion
We asked HMRC what areas of the tax system need to be addressed to achieve efficiencies. HMRC said the tax system is very complex, which generates opportunities for evasion and avoidance, can cause errors and increase costs through greater customer contact, as taxpayers seek reassurance from HMRC on what they need to do.21 It explained that it can often be very difficult to simplify tax policy because complexity can be there for good reasons, such as to achieve policy objectives and maintain fairness. However, HMRC said that simplification is the main way to help reduce burdens on business. It explained that, since the abolition of the Office of Tax Simplification in 2022, HMRC and Treasury policy advisers are responsible for covering simplification in their advice to Ministers. It told us that some announcements on simplification had been made at the 2024 Autumn Budget, and it hoped that further announcements could be made in spring 2025.22 Trust in HMRC
Government Response Summary
The government agrees with the implied recommendation to simplify the tax system and will publish HMRC's Transformation Roadmap by Summer 2025, detailing plans to simplify administration and reduce customer burdens, including metrics for progress and considering the measurement of individual administrative burdens.
Government Response
Accepted
HM Government
Accepted
1.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2025 1.2 The government has committed to simplifying the tax system and taking this forward as part of its three strategic priorities for HMRC (improving day-to-day performance and the overall customer experience, closing the tax gap, and reform and modernisation). 1.3 In summer 2025, the government will publish HMRC’s Transformation Roadmap which will bring together HMRC’s strategic and transformation ambitions into a single, public document. The roadmap will set out how HMRC plans to transform and simplify the way it administers tax and customs to reduce the time customers spend managing their affairs through better digital services, simplifying tax rules and improving education and guidance. The Roadmap will include the metrics HMRC will use to report progress. 1.4 HMRC already publishes the cost for HMRC to collect each £1 of tax, within its Annual Report and Accounts, which has been stable at around half a penny since 2017-18. 1.5 HMRC publishes estimates of any significant change in administrative burden on businesses arising from changes in tax policy in Tax Information and Impact Notes. The estimates draw on insights and data from a range of sources, including evidence in HMRC’s Standard Cost Model (SCM), which contains data on the costs of existing obligations. HMRC is assessing the feasibility of updating the SCM to produce a publishable estimate of business taxpayers’ costs and is also considering measurement of administrative burdens on individual taxpayers.