The new HMRC taxpayer statements may cause confusion says Simon Littlejohns, Tax Partner at Friend Partnership Limited.
HMRC will be issuing 24 million taxpayer statements for 2013/14 in the coming weeks. The statements will detail how much income tax a taxpayer has paid and how that tax has been spent.
Mr Littlejohns is concerned that the statements could cause confusion.
“Whilst I can understand the reason for the statements” says Mr Littlejohns, “I am worried that they may not help to improve HMRC’s relationship with its ‘customers’”.
Some points of confusion:
- The electronic filing deadline is 31 January 2015 for 2013/14 so many taxpayers will not have filed their tax returns yet – they will presumably not get statements;
- Those who have filed their paper returns may not yet have paid their tax. When receiving their statement they may believe that their returns have been processed which may not be the case;
- If a taxpayer’s tax figures are not yet finalised could the Government’s desire to keep the public informed backfire on them?
- One of the ‘seven things to know’ on the Government website is that ‘it’s all part of a wider aim of the Government to make the tax system fair and simpler’. How does a taxpayer statement do that? It is simply another piece of paper passing on potentially misleading information over which a taxpayer has no control – how is that fair or simple?
- Self-assessment taxpayers who complete their returns online will be able to access their statements online – why would they want to do that? It is not as if they can say that they are unhappy with the allocation so “can I pay more or less tax accordingly?”.
- Taxpayers in pursuit of fairness and simplicity would be better served by the Government if there is a concerted effort to simplify the personal tax rules in a variety of different areas.
“Call me an old cynic” says Mr Littlejohns, “but in this age of unsolicited post many taxpayers may simply add the statement to their shredding pile or get in a lather if the information provided is inconsistent with their own tax workings”.
“Time will tell whether this initiative is welcomed by taxpayers or seen as just another political use of smoke and mirrors” concludes Mr Littlejohns.