COMPLIANCE
Her Majesty’s Revenue and Customs’ (HMRC’s) one-to-many (OTM) team discusses the range of communications it sends and how it continually works to support customers to get tax right The one-to-many approach
T he sight of a brown envelope landing on the doormat can fill individuals and businesses with dread. ‘What’s HMRC after me for?’, is a common reaction most of us have experienced at some point and can sympathise with. Such communications might include what are commonly referred to as OTM letters. But why does HMRC send these letters? OTM describes a single, common approach to communicating with multiple customers, with the intention of helping them to understand and meet their tax obligations. HMRC sends OTM letters to customers where there’s a risk of unpaid tax, generally across a particular sector or group of customers who have similar financial situations. This might happen: ● where there are new tax rules ● if the rules are complex and perhaps not understood, or ● in circumstances where there’s evidence of previous mistakes. These communications can go out to small or large groups of customers and have addressed areas of the tax system from offshore income to music royalty payments. OTM letters can be issued to encourage awareness and education: ● in relation to changes to guidance or legislative requirements before a tax return is due (upstream) ; or ● where a particular group of customers may not have completed some element of a tax return accurately (downstream) . Ideally, OTMs are operated in as much of an upstream setting as possible – adopting a promote approach so customers can accurately submit their returns and get everything agreed first time. This prevents further correspondence, uncertainty and the need for HMRC to take corrective action. The team considers the best method of communicating in each instance. OTMs don’t always take the form of a physical letter on the doormat; sometimes the messages are delivered through other channels; for example, via text message or email. However the communications are
delivered, OTM campaigns aren’t about simply sending a message, seeing who responds, then moving on. Careful planning and sequencing are needed to ensure the relevant teams within HMRC are ready to respond to the customer contact the campaigns generate, to offer additional support and guidance. There are people in place to undertake follow-up activity with those customers who don’t respond to the OTM approach, who are likely to require additional contact and engagement. HMRC would rather maximise the opportunities for customers to get things right themselves, and only open enquiries when necessary. It’s much less worrying for customers and more cost-effective for HMRC. Supporting customers in getting tax right HMRC knows it issues communications on a range of complex subjects and understands that tax is daunting for some people. So, although everyone is responsible for making sure they declare and pay the right amount of tax, HMRC tries to help its customers to navigate the complexities involved. Using OTM communications well is an effective way of helping customers to get things right, even where rules are complicated. OTMs are not the only way customers are supported, and the intention is to use them in a way that complements HMRC’s other activities, such as continuing to improve public guidance and ensuring it’s widely accessible. Understanding customer needs, and the kind of issues which cause error or confusion is important. HMRC wants to ensure planned communications are targeted and clear, and the impacts on particular groups of customers are considered. That’s why the one-to-many compliance advisory board (OCAB) has been established, which includes representatives from professional bodies, such as the: ● Association of Taxation Technicians (ATT) ● Chartered Institute of Taxation (CIOT) ● Institute of Chartered Accountants in England and Wales (ICAEW) ● Low Income Tax Reforms Group (LITRG)
● Chartered Institute of Payroll Professionals (CIPP). Sample letters are shared with the representatives, along with a forward look of the OTM work, to allow them to feedback their ideas and views on HMRC’s plans. This enables the OTM team to consider the following: ● external perspectives on its messaging ● the timing of campaigns ● any potential customer impacts. Teams preparing OTMs to send to customers need to be clear about why they are writing, what the customer needs to do and what happens next. Customers need to understand their rights and the safeguards available to them. And throughout the process, commitments under HMRC’s Charter (which defines the service and standard of behaviour customers can expect), should be met. Within HMRC, there’s a ‘design community’ for OTM project leads to help with: ● sharing good practice, lessons learnt and expertise across business lines ● providing a dedicated forum to review OTM activities ● driving up consistency across OTM communications. What’s HMRC trying to achieve in its OTM approach? HMRC is working hard to ensure external stakeholder input is effectively drawn into the development of OTM campaigns and is integral to planning and individual project design. This will strengthen the partnerships and collaboration between representative bodies (through OCAB) and OTM project leads. The insight of external stakeholders and delivery partners is used to improve design and understand the impact of planned compliance activity on customers. HMRC wants to continue to enhance the effectiveness of its OTM activity through engagement with representative bodies, and the value of being open to feedback and ideas for improvement is recognised. n
| Professional in Payroll, Pensions and Reward | September 2022 | Issue 83 24
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