MEMBERSHIP INSIGHT
On your behalf
Policy team update
Diana Bruce MCIPPdip, CIPP senior policy liaison officer, provides an update
Making Tax Digital Forum At the end of January 2017, and following extensive consultation with more than 3,000 responses, HM Revenue & Customs (HMRC) issued in-depth detail on digitising the tax system. Alongside draft legislation HMRC published its responses to the six consultation documents issued in August 2016; contrary to many of the headlines in the media HMRC say they have heard a lot of positive feedback. The second meeting of the Making Tax Digital Forum (MTD Forum) was held in February and CIPP’s senior policy and research officer, Samantha Mann, attended. The aim is that the group will be an effective forum for HMRC to explain and explore implications of potential changes to policies, products and processes relating to MTD, and provide an opportunity for early review of guidance and information to make sure processes are clearly explained so that customers understand what is required of them. The MTD Forum will reflect the internal HMRC organisation of the MTD programme and, in recognition of the differing stakeholder priorities, separate time will be allocated to changes relating to individuals and those relating to businesses. ● Dynamic coding – Under discussion once again was the fact that from 2017–18, HMRC will be using real time data to make automatic adjustments to pay as you earn (PAYE) tax codes as they happen. As we all know, the current process is that any underpayment of tax that remains owing at the end of the tax year can either be
coded out by way of an adjustment to the following year tax code, or be paid in full by the tax payer/s. ...increase in employee enquiries relating to tax code changes as customers get used to this change From April 2017, HMRC will be looking to the data that has been submitted using the full payment submission (FPS) returns by employers and pension companies and assessing during the tax year whether an individual may be on target to owe a balance at the close of the tax year. Where this happens, HMRC will amend their tax code to make that collection before and not after it arises. The article ‘Paying the right amount of tax’ has been included in the February 2017 issue of Employer Bulletin (http://bit.ly/2lj4GU7). Members of the MTD Forum raised concerns about the impact of coding out double underpayments. For example, what about the effect on the vulnerable/low paid of receiving a letter or coding notice and the hardship and distress this may cause. People not reading the letter or the coding notice may only realise there is a problem when their pay suddenly reduces. Could an individual ask to have coding out of a
second underpayment deferred? It is acknowledged that, in the short-term, employers may receive an increase in employee enquiries relating to tax code changes as customers get used to this change. Coming out of the MTD consultation paper Transforming the tax system through the better use of information (http://bit. ly/2cwLHia) the aim is for HMRC to make better use of information that is being submitted by third parties and remove the need for the customer to have to report to HMRC information that it already holds. A win-win all-round? Your views as ever would be welcomed to the team at policy@cipp. org.uk . ● Personal tax account – The personal tax account (PTA) (www.gov.uk/personal- tax-account) is seen to be the priority resource for employees to see all the information that HMRC holds about them. It includes, for example, their tax code and how it is calculated, information on tax credits, National Insurance contributions, state pension, company car and marriage allowance; and further services are being added all the time. The ultimate aim is that
| Professional in Payroll, Pensions and Reward | April 2017 | Issue 29 4
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