OTS Claims and Elections review
This new report explores ways of simplifying the process of making claims and elections across the tax system.
Documents
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Almost all of the UK’s 1,190 tax reliefs require that the taxpayer makes a claim to receive the relief.
In this report, the independent Office of Tax Simplification (OTS) explores ways in which the administrative processes for making claims and elections could be simplified, across Income Tax, Corporation Tax, Capital Gains Tax and VAT.
The report makes 15 recommendations, both on general areas that would help to improve the operation of claims and elections across the tax system and on specific claims and elections where processes could be simplified.
The key areas, where the recommendations would benefit the largest number of people are:
- Increased functionality of the personal tax account and the business tax account (including the forthcoming, merged, single digital account), including adding the ability to make more claims and elections within the account and store information about them
- Changes to employee expenses to improve the process of making a claim as well as reducing the number of different levels of flat rate expenses that have to be considered. Over 5 million employees each year currently claim tax relief on expenses not reimbursed by their employer.
- Improvements to HMRC online forms
Bill Dodwell, OTS Tax Director, said:
Millions of people make claims and elections every year, however there are still those who aren’t making claims for all that they are entitled to. Claims for employee expenses are a particular focus, together with claims for higher rate relief for pension contributions and gift aid donations.
We welcome the commitments that the government set out in its recent vision for the future of tax administration, including the introduction of a single online tax account that is capable of doing more. Increasing the functionality of the personal tax and business tax account, as recommended in this report and in our tax reporting and payment arrangement report, would significantly ease the process for many people.
This report also recommends changes to employee expenses, which would help employees understand what they are entitled to, as well as simplifying the process so that more people are easily able to make such claims themselves when they would like to.
Ruth Stanier OBE, HMRC’s Director General, Customer Strategy & Tax Design, said:
We are grateful to the OTS for their work on how the processes for making claims and elections may be simplified. HMRC is committed to making it easy for taxpayers to get their tax right including making it as simple as possible for taxpayers to claim the relief to which they are entitled.
We will carefully consider the recommendations in the report which will help inform our future work on building a trusted, modern tax administration system.
The OTS held a webinar from 10am to 10:45am on Wednesday 21 October 2020 to outline the findings of the review in more detail and to respond to online questions from participants.
Notes for editors
The Office of Tax Simplification (OTS) is the independent adviser to government on simplifying the UK tax system, to make it easier for the taxpayer. The OTS makes recommendations for the government to consider. It does not implement changes – these are a matter for government and for parliament.
The publication of this report follows on from the Call for Evidence published by the OTS on 11 February 2020.
The National Audit Office has reported on the UK’s 1,190 tax reliefs
The government recently published their vision for ‘Building a trusted, modern tax administration’ which sets out their ten year strategy for the future of tax administration. The OTS hopes that the government considers the suggestions and recommendations included within this report in the context of their future work on building a modern tax administration.
Press enquiries only please contact Julie Gillespie, OTS Press Officer 03000 585028