HMRC has issued a request for evidence, innocuously called 'The Tax Administration Framework: Supporting A 21st Century Tax System', but don't let the bland title fool you; TAFR could be the start of a complete overhaul of the tax system.
"The scope of the request is absolutely staggering!"
It encompasses legislation, process and guidance. It is looking to improve all aspects of the tax system, from how individual taxpayers get into the system to whether data could be better used to change tax assessment. TAFR may not actually change policy, but it can certainly have an impact on how policy is implemented.
The intention here is to make the tax system simpler and better to understand. It will be easier to navigate, far more flexible and able to adapt to future challenges such as another pandemic.
"The vision is of a real-time, end-to-end digital tax system!"
Taxpayers only provide HMRC with data once, and everything else is automated. If it is done correctly, situations such as Capital Gains Tax being reported on within 30-days of a property sale, then needing to be included in a self-assessment tax return will disappear.
I feel that this new future tax system will be welcomed by taxpayers, accountants and HMRC alike, but it's going to be a challenge to get right. The IT infrastructure for this alone is going to be massive. However, it's never too early to be prepared.
Ensure your bookkeeping and accounting is completely digital as soon as you can.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the Tax Administration Framework, call me on 01908 774320 and let's see how we can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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