Financial Secretary to the Treasury on a tax service for the 21st century
Financial Secretary Jane Ellison addresses the HMRC Annual Conference.
Good morning. It’s good to see so many of you here this morning.
I wanted to give a short introduction to this session and set out some of my initial thinking after 50-odd days in the job.
Firstly, it’s vital that we maintain an open and constructive dialogue between HMRC and its stakeholders.
Between you, you have the expertise and the experience to ensure the tax system is working at its best.
I look forward to working with you all and listening to your words of wisdom.
Tax Post Referendum
Let me quickly turn to the most pressing issue for the government.
After the decision to leave the EU, there’s a lot to be getting on with.
You are no doubt looking at the implications yourselves.
And in HMRC and the Treasury, just as across government, we’ve spent the summer undertaking a huge exercise to look at the consequences, and of course opportunities, associated with our exit. You may be aware that David Davis will be updating the House later today.
There are still questions that need answering at this stage before concrete decisions can be made but the work and preparations go on as I speak.
Continuity of Approach
Aside from that, the governments work must go on and at the heart of that is our tax policy where we’ve made promises to deliver a fairer, efficient and competitive tax system.
Let me start with fairness.
We don’t want a tax policy that sees those who are struggling the most, hit the hardest.
And this was something that the Prime Minister made a point of saying in her very first speech on the steps of Downing Street.
So I’ll be working over the coming months to continue delivering on that agenda.
We also want to make sure that the tax that is due - is paid.
We’re doing this both by making it easier for the honest majority to get their taxes right, and by making it harder for the dishonest minority to cheat the system.
And actually, what I think we’re seeing today is a big culture shift when it comes to tax…
In fact HMRC’s latest survey on attitudes to tax bears this out…
Because it shows that big businesses are increasingly adopting the mind-set that attempts to avoid tax just aren’t acceptable. Indeed, it can be counterproductive.
And I want to pay tribute to everyone in HMRC and in this room for helping to bring about that change.
Because the Department is really leading the way on tackling tax evasion and avoidance in any form, through a huge range of innovative initiatives.
From fining those advisers who help their clients avoid tax.
To increasing sanctions against the most persistent offenders in the hidden economy.
And I’m also delighted to announce today that we have collected £3 billion since 2014 from people using avoidance schemes, as HMRC put its new powers to use by issuing ‘accelerated payment notices’ to good effect.
That’s £3 billion raised to deliver our public services.
As an example, that’s £3 billion towards the £4.8 billion we’re investing on capital spending in Health every year for the remainder of the Parliament.
So HMRC should feel a real satisfaction from what they are achieving.
They are collecting record tax receipts year on year.
They are tackling the tax gap and increasing compliance.
And they are doing all of this at the same time as cutting costs.
There’s always more to do - but I want to say a huge well done to all those who have worked so hard to achieve this.
Our third priority, is making sure our taxes are supporting our businesses.
As someone who has worked closely with companies of all kinds as President of the Wandsworth Chamber of Commerce, I’ve seen first-hand just how much lower taxes can help our businesses grow.
So what we’ve done already on corporation tax, on business rates, on employer contributions to National Insurance – these are all ways to back businesses, and our economy.
And it’s also important to businesses that taxes are simple!
So we’re stepping up our efforts in this area – with some fantastic appointments over the summer to the Office of Tax Simplification.
Making Tax Digital
It is these three priorities – making sure tax is fair, paid and competitive – which will remain at the heart of what this Government delivers on tax.
But what I’m also really excited about taking forward, is our plan to establish one of the best digital tax services in the world.
Offering businesses and individuals alike the kind of digital services they expect in the 21st century.
Now I know it’s not the case for everyone – and for those who can’t get online, we will make special provisions. But I’m sure that most people – in this room, and in this country – are used to doing both their personal, and their business admin, online.
And it’s just not right that our tax service should lag behind – stuck in an age of paperwork, letters and phone calls.
That’s why we want HMRC to offer all our customers a top quality, fully digital service alongside its existing services
The government have made the big billion pound investment to do it.
And in HMRC, not to mention all the other businesses and organisations represented in this room, we’ve got the talent, know-how and determination to do it.
So at a future HMRC annual conference, what I’ll expect to be saying is that “we have done it”.
Vision for the Future
It’s a bold vision for the future.
But we’ll have made life more straightforward for millions of people and businesses.
Everyone will be able to log into their accounts online, at any time, from any of their devices.
They’ll be able to see exactly what their situation is – whether it’s about their income tax, student loan repayments, national insurance contributions – you name it.
They’ll be able to add information on their income and expenses, throughout the year, as they go along.
And they’ll know what they owe as they go along – not get any, nasty or nice, surprises when the annual tax bill drops through the letterbox.
They will even be able to spread their payments by just paying as they go, if that’s easier for them.
I know this is a big change – I’ve read your tweets!
Consultation and Collaboration
There’s a lot to get right over the next few years.
And we’re going to need your help to do so!
And it’s not only Making Tax Digital, I know we’ve been keeping you busy over the summer by putting out a lot of different consultations – on everything from sanctions for people marketing tax avoidance schemes, to salary sacrifice changes.
These already reflect a lot of the feedback you’ve been giving us – and we’re really grateful for that.
But we really want you to continue to share your insights and experiences, your priorities and your concerns.
Because we listen to what you have to say.
You told us that the smallest businesses might struggle to keep their records online – so we exempted over a million more landlords and small businesses from the proposed changes.
You also told us that even slightly larger businesses might need more time to prepare for the new system – so we have proposed deferring the introduction of any changes to 2019 for those businesses too.
So your views do matter and we need to hear them.
Conclusion
I guess these are exciting times in the world of tax, and I’m delighted to have a chance to play my own part in that.
It may not be a headline grabber, but we are setting about some really important reforms to our tax system. And I’d like to end by thanking both HMRC staff for their efforts to take us into that digital future…
…As well as all the other organisations, businesses and those of you here today who are helping to get us there.
I look forward to continuing to work with you.
Thank you very much.