Richard Cornelisse

HMRC Penalties: a discussion document

In EU development, Indirect Tax Strategic Plan on 08/02/2015 at 9:05 am

As HMRC reviews and improves how we serve our customers, we are also exploring the way that we currently apply penalties when people fail to meet their tax or entitlement obligations.

We know that the vast majority of customers meet their obligations in full and on time, and that penalties are only applied to a small minority of people and businesses.

We want to make sure our approach works as well as possible. This is why we want to consider whether we could better differentiate between deliberate and persistent non-compliers and those who might make an occasional error for whom alternative interventions are more appropriate.

A modern tax system

  1. We aim to be an effective, efficient and impartial tax and payments authority. We help the honest majority to get their tax right and make it hard for the dishonest minority to cheat the system.
  2. Part of helping the honest majority involves delivering on the Government’s commitment to make the UK tax system as user-friendly and efficient as possible, which also means making tax policy simpler and easier for people to understand.
  3. To do this, we are improving how we work, introducing new digital services that make it easier for customers to get things right first time. We will put customers at the heart of everything we do by moving away from services that are based around traditional tax regimes to services designed around our customers.

Digital services

Our digital plans will transform the way we operate and serve our customers. One example of how we plan to do this involves a personalised tax account for customers, so we can help make it simpler, quicker and easier for them to pay the right tax at the right time.

Our digital services for our customers will:

  • be easy to use, convenient and personalised for individuals, businesses and
  • agents
  • promote digital take-up and voluntary compliance by designing for customer needs
  • use data to help customers avoid errors through pre-population
  • provide assistance in using or accessing our services for those who need it
  • allow us to consult our customers on policy proposals and changes so that we can improve them.

Compliance

Improving our services means changing the way we think about compliance.

New technology will enable us to deal with the vast majority of compliant customers – and those who try and bend or break the rules – by using more accurate, up-to-date data that gives us a more ‘real time’ view of a customer’s tax and benefits affairs.

By introducing services that make it easy for customers to get things right, we will reduce the risk of errors – saving them and us time and money.

Our digital services will also give us access to more and better data about our customers, which will enhance further our compliance activities.

We will be able to look at a customer record across all our tax regimes and previous tax periods, providing us with an insight into whether that individual or business poses a tax risk.

This more targeted approach means we can then focus our compliance activity and expertise on those determined to bend or break the rules.

Penalties

Penalties are applied to encourage taxpayers to comply with their obligations, to act as a sanction for those who don’t and to reassure the compliant majority that they will not be disadvantaged by those who don’t play by the rules. We don’t use penalties as a way of raising revenue, or to offset our running costs. In essence, we want compliance, not penalties.

Aim of this discussion

It’s important that we design tax policy for a modern, digital world and make the most of the opportunities this technology provides. As we change the way in which we operate, we believe we will need to change the way in which we apply penalties.

This discussion document looks at how we might be able to do this. We want feedback from individuals and businesses so it can influence our thinking at this early stage.

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Publication date: 2 February 2015 Closing date for comments: 11 May 2015

SAOG – Senior Accounting Officer Guidance (UK)

In Audit Defense on 25/01/2015 at 10:59 pm
  • SAOG01000 Introduction
  • SAOG05000 How to use this guidance
  • SAOG10000 About Senior Accounting Officer provisions
  • SAOG11000 What is a qualifying company
  • SAOG12000 Who is a Senior Accounting Officer
  • SAOG13000 Notifying Senior Accounting Officer details to HMRC
  • SAOG14000 Senior Accounting Officer Main Duty
  • SAOG15000 Senior Accounting Officer must provide a certificate to HMRC
  • SAOG16000 Tax Compliance risk management process
  • SAOG18000 In what circumstances is a penalty chargeable
  • SAOG19000 What to do when you think a penalty may be chargeable
  • SAOG20000 Reasonable excuse
  • SAOG21000 Assessing the penalty
  • SAOG22000 Appeals
  • SAOG23000 Other matters
  • SAOG24000 Glossary

SAOG – Senior Accounting Officer Guidance (UK)

Indirect Tax Management

In Indirect Tax Automation, Indirect Tax Strategic Plan, Processes and Controls on 23/01/2015 at 11:40 pm

‘Why’, ‘What’, and ‘How’ of Managing an Effective Indirect Tax function

The global tax environment is in a state of fast change. A shift to indirect taxes represents the global trend. Driving Indirect Tax Management therefore becomes more and more important. The key to success in the management is the ability to translate indirect tax knowledge into a workable business process.

In general the advisory sector may bring you a wealth of knowledge but in practice the translation gap to a process within the actual execution of the theory makes a business vulnerable for an endless increase in consulting cost and an ineffective approach in timely dealing with current indirect tax exposures. This may easily result in a financial disaster.

Tax authorities are continuing to pick up on the common weaknesses identified in the Indirect Tax function. The restyling of the indirect tax function in a business may have to be considered by a business in order to deal with the increasing number of indirect tax challenges or to benefit from indirect tax opportunities.

Enhance the indirect tax communication within the business functional hierarchy, increase business awareness of the current state of its indirect tax function and set the right priorities for in-house stakeholders/departments (AP, AR, Legal, Finance etc) to successfully move to a best-practice is our philosophy.

Our aim is to share our expertise with you through this website, to create and share current state benchmarking knowledge, to inspire and also challenge your department functions through offering modules that can be used to scope process gaps from an indirect tax perspective.

A mythological way to express our mission statement would be to compare the general Indirect Tax function with the fall or rise of the Phenix legend.

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