Making tax easier through smarter use of third party data

Today (4 February 2021) the Office of Tax Simplification has launched a short taxpayer survey to run alongside the call for evidence published on 27 January 2021, for its review of ways to make tax easier for people through smarter use of third party data. This follows the publication of the scoping document for this review on 17 December 2020.

If you would like to feed into our work through the survey we would welcome your views by 9 April 2021.

The OTS would welcome the opportunity to hear from those who have an interest and asks for written responses to be sent to ots@ots.gov.uk by 9 April 2021.

If you would like to meet online with the OTS to discuss the review, then please contact the OTS at ots@ots.gov.uk by 12 March 2021.

In this review, the OTS is considering whether and in what ways it could be helpful to individuals and improve their experience of the tax system, for different sources of third-party data to be submitted to HMRC on their behalf. It will explore any concerns they may have and whether and in what ways these could be overcome.

The review is considering alternative ways for HMRC to receive and use information that is already provided in some form either by individuals or third parties, rather than considering the provision of new types of information.

So for example, instead of millions of individuals having to provide to HMRC details of potentially taxable income and gains on their investments, the review will consider whether it could instead be uploaded by their investment or wealth management company and reflected in their online tax account or self-assessment return.

In addition, many people who are eligible to claim relief from higher rates of tax for charitable donations or pension contributions, do not currently do so. This review will consider whether this information could instead be reported to HMRC on the individual’s behalf by a third party and be prepopulated into their return or claimed through the online tax account, and the potential benefits and drawbacks of such an approach.

The OTS is the independent adviser to government on tax simplification, challenging tax complexity to help all users of the tax system; it does not implement changes - these are a matter for government and for Parliament.

The OTS works to improve the experience of all who interact with the tax system. It aims to reduce the administrative burden - which is what people encounter in practice - as well as simplifying the rules. Simplification of the technical and administrative aspects of tax are each important, both to taxpayers and HMRC.