Opinion Former Article

Chartered Institute of Taxation urges focus on customer service to close the tax gap

Commenting on HMRC’s Measuring tax gaps 2019 edition, published today, CIOT President Glyn Fullelove said:

“The Government will be disappointed that progress in reducing the tax gap seems to have stalled, albeit at what are historically, and internationally, fairly low levels.

“Estimating the tax gap is a complex and necessarily imprecise process so we should be careful not to read too much into small year on year changes. But a sustained fall of three quarters in the share of the potential tax take being lost to avoidance since 2005 is significant and a tribute to the actions of successive governments as well as a change of culture around what is regarded as acceptable behaviour.

“These figures suggest that tax evasion and other illegal activity are costing the Exchequer seven times as much as tax avoidance. The CIOT has long argued that HMRC needed to focus more on investigating and prosecuting those who seek to evade tax. The government are right to have put extra resources in this direction in recent years, as well as tackling artificial and abusive attempts to avoid tax.

“The numbers in this report illustrate the complexity of the tax system. Nearly £10 billion of the tax gap relates to taxpayers inadvertently not getting things right, through what HMRC categorise as error or a failure to take reasonable care. As some other parts of the tax gap have fallen these have remained stubbornly high.

“HMRC must now focus on customer service as a direct way to help large numbers of ordinary taxpayers who find themselves confronted by ever more complex tax law and increasing compliance obligations. If the tax authority needs more resources to help taxpayers to pay the correct sums, then they should get it.”

Notes for editors

1. Measuring tax gaps 2019 edition - tax gap estimates for 2017 to 2018 can be found here: https://www.gov.uk/government/statistics/measuring-tax-gaps

2. The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 19,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk

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