AN ONLINE disclosure service is set to be launched by HMRC in April as the government department continues to move towards a digitally focussed administration.
Dubbed as a “one stop solution for customers to disclose tax liabilities”, the online platform will allow customers to upload documents digitally, removing the need to send them by post.
The service will be up and running by 6 April and will include a number of features for those who are disclosing, including online guidance that will assist the ‘customer’ in ensuring that the disclosure is correct in the first instance.
The project was brought to light during last year’s Budget, where George Osborne mentioned that a digital disclosure channel would be created to make it simpler for taxpayers to reveal their unpaid tax liabilities.
Last September, HMRC’s Fraud Investigation Service (FIS) went into greater detail regarding the automated digital disclosure platform, revealing that it would be available for customers across all tax regimes and behaviour types.
“The Digital Disclosure Project involves the design and development of an IT solution for an automated web-based customer interface that would facilitate the automatic capture of disclosures,” said HMRC during the meeting, which was attended by a number of tax experts.
The service will also include an in-built calculator for tax, interest and penalties; assistance for taxpayers through web chat and the platform will automatically acknowledge the acceptance of a disclosure and the customer’s payment.
In addition, HMRC’s platform will allow customers to notify HMRC about any errors with their VAT returns.
“The service allows our customers to access our service to disclose tax liabilities, whilst risk assessing entries and prompting the customer to check entries which seem incorrect. The service will include guidance to help educate the customer and help prevent future errors,” continued HMRC.
Over the years, a number of taxpayers have already voluntarily come forward to disclosure their irregularities through disclosure schemes. In the past seven years, HMRC has brought in £593m through voluntary disclosure schemes and each year HMRC receives more than 30,000 VAT error corrections from small businesses alone.
‘Quite a nice little idea’
Although the Digital Disclosure Service removes the need for disclosures to be sent by post, it also removes the need for taxpayers to seek advice and help from their accountants, enabling taxpayers to disclose by themselves if they so choose.
However there are some finance professionals who advise against this. Andrew Watt, partner at Watt Busfield Tax Investigations and a former investigator at the FIS, has advised taxpayers to seek the help of their accountant.
“Taxpayers can use the DDS themselves but are unlikely, and indeed would be ill-advised to do so if they already have an accountant”, said Watt, who went onto praise the incoming service.
“Using the DDS will be optional but there is no question in my mind that it will be far more user friendly than what exists now where quite frankly unadvised taxpayers, and even some professionals, are at a loss as to whom they should make voluntary disclosures.”
The service has also gained the support from some accountants. Elaine Clark, managing director of cheapaccounting.co.uk, believes the platform could be a success if handled properly.
“It’s quite a nice little idea from HMRC,” said Clark, who has been a regular critic of the taxman’s digital projects in the past, including HMRC’s Making Tax Digital initiative.
“In terms of DDS cutting out the accountant, I’m quite happy to be cut out of things like this because if the client couldn’t be bothered to declare income in the first place, I don’t want them as a client.
“Maybe it will work, who knows? However I find it really unlikely that people who have failed to disclose in the first place will use this service just because it’s online, and do it unrepresented.”
Drastically fewer offices for HMRC in the hope to reduce their running costs
A CIO has been appointed at BDO from law firm Olswang
Tayabali Tomlin and d&t directors launch £20 a month TaxGo service, aiming to be the 'biggest UK firm' by client numbers
Global revenues have risen 8% to $7.6bn (£6bn) for BDO in 2016