Income Tax: OTS on the Single Customer Account

Income Tax: OTS on the Single Customer Account

The Office of Tax Simplification (OTS) has published an evaluation update paper on the Single Customer Account.  The paper is one of four separate notes accompanying the OTS’s everyday tax evaluation paper, providing an update on its 2019 reviews about simplifying everyday tax for smaller businesses and taxation and life events.

Key issues relating to the Single Customer Account

The OTS notes  that the pandemic has also opened up new benefits through increased digitisation and different ways of working.  COVID-19 has highlighted the importance of the tax system in delivering targeted support to people and businesses, and the OTS further notes that HMRC have shown themselves capable of rising to the challenge.

In that context:

  • the Single Customer Account is an exciting vision forming the keystone of the government’s 10 year strategic plans for administrative reform. It will need significant commitment and continued funding over several years to develop a mature product
  • the OTS considers that it would be very helpful for HMRC to provide an indicative roadmap for the Single Customer Account for individuals soon, setting out key development stages at which additional functionality or areas of tax would be added, and target dates
  • alongside this, HMRC need to strategically plan an ongoing staged launch process for the new account so that individual taxpayers and others will be ready to fully engage with and benefit from the new system as soon as it is rolled out and as additional functionality or elements are added, as set out in the roadmap
  • as well as including the facility to handle a progressively greater variety of types of Claims and Elections, and Capital Gains Tax, the account should also include the State Pension and could potentially be extended in time to include some Social Security benefits
  • as much of the data used to populate the current accounts is Pay As You Earn (PAYE) data, the OTS considers that HMRC should overhaul the PAYE system at the same time as developing the Single Customer Account. The OTS has published a separate update note on improving the operation of the PAYE system
  • HMRC’s strategy for the Single Customer Account also needs to be closely aligned with HMRC’s agent strategy, with appropriate agent access to data being built in from the beginning. The OTS has published a separate update note on agents
  • the OTS suggests that HMRC should consider immediate improvements that could usefully be made to the Personal Tax Account in the short term, such as prompts relating to the High Income Child Benefit Charge (see the separate OTS HICBC update note)

The evaluation paper can be found here: OTS evaluation paper on the Single Customer Account – GOV.UK (www.gov.uk)

We are experienced with the compliance matters around the income and capital gains tax.  Please do contact us if you wish to discuss or need assistance with tax compliance.

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