TaxCorporate TaxNAO calls for review of business tax registration process

NAO calls for review of business tax registration process

Report urges tax authorities to introduce a single online registration for all business taxes, with a unique identifier for each taxpayer

national audit office

The NAO is urging HM Revenue & Customs to introduce a single online
registration for all business taxes, with a unique identifier for each taxpayer
and a single one-stop helpline to improve compliance by new businesses.

The longer-term proposals are contained in a report urging the tax
authorities to better target help and advice for new businesses and enlist the
support of tax agents, other financial organisations and the Small Business
Service.

It also calls on the department to simplify forms and produce guidance using
plain English. It singled out the VAT registration form for particular criticism
as being ‘more difficult to complete’ and complaining guidance that ‘is complex,
contains long sentences and a lot of acronyms and uses technical terms’ and
requires a reading age of 16 or 17, which is above the level of five million
citizens.

Comptroller and auditor general Sir John Bourn said his recommendations ‘will
help HM Revenue & Customs in further improving the ability of new businesses
to deal with their tax affairs.’

He said: ‘Introducing a unique tax identifier would require substantial
resources but could also result in substantial benefits, enabling HMRC to view
the entire tax affairs of individual businesses and achieve a better
understanding of the needs of different groups of taxpayers.’

About 700,000 new businesses start up each year, which are required by HMRC
to register separately; completing complex forms for income tax or corporation
tax, PAYE and VAT. It means 1.2 million new tax applications a year.

The NAO said: ‘The requirement to register separately for each tax can
duplicate effort for businesses – and the department – in providing and
processing the same information each time.

‘The department could reduce the burdens on businesses by unifying the common
elements of registering for different taxes, and by expanding the facility to
register online.’

It added: ‘The experience of tax authorities overseas suggests that a unique
reference number for all taxes would involve significant costs and take several
years to introduce. But it would bring benefits to businesses and enable the
department to link data on taxpayers across its separate computer systems;
thereby achieving more efficient processes and improving the service provided to
businesses.’

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