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Of the many questions posed in the consultations issued on tax administration and maintenance day (tinyurl.com/hmrctafrev23), the most intriguing was this: ‘What are your views on retaining the principle that taxpayers are responsible for accuracy of their return(s)?’
The context is the discussion of pre-population of returns and is prompted at least in part by the question having been raised by the Office of Tax Simplification. Anybody who has been involved in tax compliance will know that, although in law taxpayers are responsible for their return, many of them see things differently in practice. ‘I pay my accountant to do my return and trust him to get it right: I just sign what is put in front of me.’ One can easily see a taxpayer saying of a pre-populated return ‘if that’s what HMRC says my income is who am I to argue’, although I am not sure whether many people would say that if the actual figure is lower than the pre-populated one.
These are difficult issues. When your software is updated do you always read the terms and conditions before you click to say that you have read them? I don’t and I suspect that only a handful of people ever do. I can see people taking the same attitude to tax returns where HMRC has provided all of the figures. It is undoubtedly right for HMRC to raise this issue here because responsibility for the accuracy of a return is one of the fundamental building blocks of the tax administration system.
Let’s hope that there is the widest possible response to the consultation and that HMRC and the profession can work together to reach a consensus of how to take this forward.
If you do one thing...
If you have charity clients or clients who make large charitable contributions, read the consultation on charities tax compliance (tinyurl.com/hmrcchcondoc).
