Timely Payment External Working Group (closed)
The Timely Payment External Working Group was an HM Treasury and HMRC-sponsored group established to help shape timely payment policy, including the in-year calculation proof of concept, but is no longer operational.
This group ceased being operational in May 2023.
Terms of reference
Background
The UK government committed to establishing a timely payment external working group in response to the timely payment call for evidence.
The group will collaborate on and co-design aspects of timely payment policy and the in-year calculation proof of concept, working together to understand the implications and impacts of timely payment for different types of business and sectors, and to identify potential mitigations. The government will not proceed with an in-year calculation until it is confident it can do so accurately and reliably.
Through participatory design, the group expects to develop policy and/or systems that support taxpayers and mitigate or minimise the impacts of timely payment.
The government committed that no changes to payment timings will be implemented within this Parliament, recognising that this is a long-term ambition.
Objectives
The timely payment external working group, using their diverse knowledge, experience, and information resources, will:
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co-design aspects of the in-year calculation proof of concept by:
- exploring data requirements, acquisition, and ingestion to enable testing of accurate in-year calculations across a range of complex, real world scenarios
- assessing the potential impact of in-year calculation on customers and data providers, and testing mitigations through the design of the in-year calculation proof of concept
- collectively establishing the optimal in-year calculation proof of concept design
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influence policy development of timely payment by:
- helping to understand the implications and impacts of timely payment for different types of business/sectors
- using insight to collaborate and influence in-year calculation proof of concept process design and delivery to mitigate or minimise these implications or impacts
Scope
This group will only consider timely payment for taxpayers in Income Tax under Self- Assessment and Corporation Tax under Self-Assessment for those outside of the quarterly instalment payment regime.
While co-design will help shape aspects of the in-year calculation proof of concept and timely payment policy, the government will ultimately make policy decisions based on data and evidence to ensure policy outcomes suit a wide range of users, and to ensure delivery of the wider Tax Administration Strategy by incrementally modernising the tax system.
First phase - the in-year calculation proof of concept
The design phase of the project commences in April 2022, and as such the current priority is for the timely payment external working group to contribute to the design of the in-year calculation proof of concept through the following themes:
- data requirements and acquisition; to explore how we acquire the necessary data to carry out an in-year calculation across a wide range of business sectors and models to ensure we can test calculations on complex, real world scenarios
- data ingestion; to explore how to ingest data most efficiently in real-time and assess and mitigate the impacts on data providers (3rd party, intermediaries, and taxpayers)
- accuracy of calculation; to explore how to accurately calculate liability, including how to reconcile allowances, reliefs, dividends etc. and expenses. It will also consider how best to reconcile multiple and seasonal/fluctuating incomes
- customer barriers and support; this theme will explore what the customer experience of in-year calculation will be and assess potential barriers to its use such as digital exclusion. It will explore ways to mitigate barriers, and how best to support customers to utilise the system easily and efficiently
- interaction with other programmes; this theme will explore how in-year calculation will align with or impact wider government services and strategies such as Universal Credit, Government Grants, Making Tax Digital, COVID recovery etc
Second phase – timely payment policy development
The second phase will consider wider themes for timely payment policy development. To note, the 2 phases are inextricably linked, and the timely payment external working group will work iteratively as the development and outputs of the in-year calculation proof of concept will aid sequencing and prioritisation of the themes. The following are initial themes for the timely payment external working group to consider:
- cash flow; assessing impact across different business sectors (including exploring sector-specific influences eg, seasonal workers)
- administrative burdens; assessing administrative burdens across different business sectors, including represented versus unrepresented
- vulnerable taxpayers; assessing unique challenges such as interaction with DWP and the benefits system, digital exclusion etc.
- a flexible model of timely payment; assessing the challenges of a ‘one size fits all’ approach to timely payment and whether a more flexible system would be more suitable (although recognising that this might bring additional complexity)
Structure and frequency
The timely payment external working group/sub-group meetings will be held ahead of key insight requirements or decision points of in-year calculation proof of concept design and delivery to maximise co-design opportunities while minimising additional burdens on stakeholders’ time; we expect this to be not less than every 3 months.
Given the wide scope of timely payment and to ensure the most efficient use of the expertise across the group, sub-groups will be formed to work through particular issues or challenges in detail.
Establishing sub-groups will be an iterative process and will reflect the policy or system needs as timely payment is developed. The timely payment external working group will collectively decide and agree on sub-groups, including defining objectives and membership; the secretariat will draft terms of reference for each sub-group, which will be approved by the working group.
Meeting logistics
Timely payment external working group:
- chair: the timely payment external working group will be chaired by a senior official from HMRC
- secretariat: a secretariat will be provided from the HMRC timely payment team
- papers: papers and agendas will be sent out at least 3 working days before the meeting. The secretariat will note discussions and actions and will provide a readout to all members
Sub-group
- chair: each sub-group will be chaired by a representative from HMRC
- secretariat: a secretariat will be provided from the HMRC Timely Payment team
- papers: papers and agenda will be sent out at least 3 working days before the meeting. The secretariat will note discussions and actions and will provide a readout to all members
Accountability and conduct
Accountability and conduct:
- to support the aim of having open conversations and to facilitate collaborative working, our discussion will be underpinned by the principles of the Chatham House Rule, as explained in greater detail on the Chatham House website
- where necessary, some contributions to the timely payment external working group and sub-groups will be made in the strictest confidence to protect the integrity of HMRC and other government systems. Where relevant, this will be specified at the beginning of the meeting
- participants in the timely payment external working group may use information obtained in discussions for the purpose of internal research and policy development
- when producing meeting reports neither HMRC, HMT, nor working group participants will attribute any comment or point of view to any individual members of the timely payment external working group or its sub-groups, without seeking their permission first
- HMRC are not entering commercial agreements with those attending. Any commercial tendering will be done according to existing rules and legislation
Members
| An author, with interest in customer barriers and support |
| Apari Digital |
| Chartered Accountants Ireland |
| Chartered Institute of Taxation |
| Crunch |
| Deloitte |
| Department for Work and Pensions |
| Earnr |
| Ernst & Young |
| Grant Thornton |
| Innovate Tax |
| Institute of Certified Bookkeepers |
| Institute of Chartered Accountants in England and Wales |
| KPMG |
| Low Incomes Tax Reform Group |
| Moore Kingston Smith |
| National Farmers’ Union |
| Office of Tax Simplification |
| Sander Events |
| Scottish Government |
| Tax Policy Advice |
| Taxcalc |
| The Association of Taxation Technicians |
| The Country Land and Business Association |
| The Federation of Small Businesses |
| The Law Society |
| Untied |