Making tax easier through smarter use of third party data
Executive summary
Most AAT Licensed Accountants who responded to its survey on smarter data usage did not believe third party data usage created any significant issues at present and had very few concerns about third parties providing data to HMRC in the future.
Smarter use of third party data could benefit individual taxpayers and small businesses, the accountancy profession, and the wider economy. Individuals will spend less time searching for information, accountants less time prompting and chasing clients for information and mistakes, errors and evasion will likely be reduced.
HMRC must always work on the basis that third party data is not always more reliable simply because it has not come from an individual taxpayer. It is imperative that the taxpayer or their agent has an opportunity to evidence the correct figures before any action is taken.
Many other countries are well ahead of the UK in relation to the pre-population of tax returns and the provision of relevant financial information from third parties. The UK needs to take considerable steps if it is ever to come close to realising its ambition to have the most digitally advanced tax administration in the world.
Related consultation responses
Raising Standards in the Tax Advice Market: AAT's submission to HMRC
AAT argues for mandatory membership of professional bodies for all paid-for tax advisers to address the high levels of poor-quality tax advice in the UK.
Online sales tax: assessing an option to help rebalance taxation of the retail sector
AAT believes an online only sales tax, that will not replace business rates but provide funding for reduced rates for some retailers, would not be effective.
Review of the Office of Tax Simplification
We would like to see the OTS given additional resources and see it become involved in the development of new taxes rather than just existing tax reform.
