Business News

Tax Specialists Criticise Paperwork Cuts

Tax experts have hit out at HM Revenue and Customs’ (HMRC) plans to stop issuing copies to tax agents of some mail sent to their clients to help cut costs.

The Chartered Institute of Taxation (CIOT) said that while it supports the need to reduce government spending, it is concerned that the move will result in extra work for HMRC, taxpayers and their agents and potentially create costs greater than savings.

CIOT Deputy President Anthony Thomas said: “This is a seriously short-sighted move.

“By keeping tax agents less well-informed about their clients’ tax obligations HMRC are likely to find they lose more money than they save.

“HMRC estimate that not sending copies of PAYE coding notices (P2s) and tax calculations (P800s) will save them £1.25 million. But they have not estimated the cost of dealing with an increased number of enquiries from agents, let alone that of dealing with the higher number of erroneous tax returns which is likely to result.

“It is particularly disappointing that this change is being sprung on taxpayers and their agents with more or less immediate effect and without consultation.

“If they are set on proceeding, then much more effort will need to be put into telling all taxpayers about the changes. At the moment all that is planned is a message on letters from HMRC to taxpayers, but if the taxpayer doesn’t read letters obviously from HMRC (which is not uncommon, on the basis that they leave that to their agent) they will not see the message on the letter telling them to show it to their agent.”

HMRC say it has tried to look for savings in areas where there will be minimal impact on customers.

LINKS: HMRC information