Report highlights need for Department interaction with tax agents
Summary
HM Revenue & Customs (HMRC) should communicate effectively with intermediary third parties for customers to receive accurate tax returns.
In the report, ‘Engaging with Tax Agents: HM Revenue & Customs’ (HC 486), the National Audit Office (NAO) identifies the importance of tax agents as it has been estimated that around eight million taxpayers receive help to file income and corporation tax returns each year.
Tax agents are responsible for filing approximately:
- 65% of self-assessed income tax returns;
- 78% of Corporation Tax returns for small and medium sized enterprises;
- 33% of end-of-year PAYE returns filed by employers; and
- 43% of VAT returns.
At present, lack of data on individual tax agents prevents the Department from taking a tailored approach to its dealings with agents and providing feedback on performance. With better use of data, HMRC could make more targeted interventions based on risk and achieve greater value for money.
HMRC has recognised the importance of developing its relationship with tax agents and has taken steps to work more effectively with this group. Initiatives have included the introduction of a priority telephone line for agents' queries on self-assessed income tax and PAYE. The Department has also encouraged tax agents to file tax returns online.
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