Taxman in telling people about tax shocker
The Government thinks that “for many taxpayers, the tax system can feel remote and confusing [and] believes that people’s understanding of what they pay could be better”. No sh*t Sherlock, but at least today's Treasury announcement shows that they are trying. Very trying, some might say.
The Government has issued a consultation document calling on taxpayers, representative bodies, and tax professionals to give their views on:
what taxpayers know about the tax they pay;
what areas of the personal tax system create the most difficulty;
how technology can help them better access and understand their tax position; and
how we can engage with individual taxpayers in hearing their views on how the tax system could be modernised.
This is part of an overall transparency and information drive to make things easier for Joe Taxpayer to understand so he can better deal with his own tax affairs. Sounds radical.
Some of the proposals outlined in the document include:
-Giving every taxpayer online access to their tax records, on a ‘real time’ basis
-supplying pre-filled tax returns to people in the self-assessment system using information from employers and banks.
-sending an annual tax statement in addition to the normal P60 form and PAYE tax code notice received by employees
David Gauke, the Exchequer Secretary, said: "At the moment, for a lot of people, the tax line on their pay slip is the only time they see just how much they're paying in tax, but the government doesn't think that's good enough."
"We plan to lift the lid on tax so that people understand how much they are paying, what their overall tax rate is, and what they should be paying, in the same way that the government has lifted the lid on what they are paying for," he added.
Similar systems already operate in the Republic of Ireland and in Denmark and HMRC are interested to know whether UK taxpayers would like a similar system.
Other questions included within the consultation are:
Do you want to know more about the tax you pay, and what do you want to know?
Where do you currently look for information on how much tax you have paid?
If you had better access to tax information do you think that you would have more confidence in:
a. HMRC; and
b. the accuracy of your own tax?
Do you know what to do now if you are unsure your tax is right?
Do you know what your responsibilities are regarding tax?
Do you want to know why tax is paid and more information on how it is spent?
HMRC are specifically requesting individual taxpayer input into this consultation, which is open until 24 February 2012. So go share your feelings on the tax system with aplomb.
Right here, right now
The announcement comes at the same time as details of a new pilot of so-called real time information (RTI), whereby employers will supply updated pay, tax and national insurance data about their staff to HMRC each month, meaning the Revenue should know at any given point whether a person has paid the right amount of tax or not.
While up to the minute information may be the way forward, the recent introduction of a new computer system for income tax and national insurance revealed that millions of tax records for the past few years had not been reconciled properly and led to millions of taxpayers either receiving a tax rebate, or asking them to pay extra tax because they had been under-taxed in the past. We can only wait and see what happens from April 2012, when the pilot starts. RTI will become mandatory for all employers from October 2013.
So what do you think? Will you be arsed to reply to the consultation? Specifically the question about how the Government can get people interested in tax? Would a pre-filled in tax return appeal to your lazy side? Would you go online in, say November, to see how your tax liability for the year was running? Do you even care?