Income Tax automation challenges
Published 11 March 2020
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Who is likely to be affected
This measure affirms that functions conferred on an officer of Revenue and Customs may be carried out by HMRC using an automated process or other means. It will have no effect on individuals, partners and corporate bodies who are issued with a notice to file or on anyone issued with a late filing penalty notice. The measure does not introduce any new obligations or liabilities.
General description of the measure
This is a technical change to confirm that processes used by HMRC to carry out certain functions, including the issue of notices to file self-assessment tax returns and notices imposing a penalty for late filing of those returns, may be carried out using a computer or other means rather than an individual officer.
Policy objective
This measure is designed to provide certainty that HMRC’s use of automated processes to serve certain statutory notices and to carry out certain functions has a firm legal footing. This technical clarification will provide fairness across all taxpayer groups and affirm the statutory basis for the existing policy and practice, which has been in place for many years.
Background to the measure
The government announced, in a Written Ministerial Statement on 31 October 2019, its intention to legislate to put beyond doubt that certain statutory notices issued by HMRC computer systems or by other electronic means have the same force of law as those issued by an individual officer of HMRC.
HMRC relies on automated processes for routine tasks, which can be carried out using taxpayer data and parameters set by HMRC. Automation is used where manually carrying out those tasks would be resource intensive and expensive. The automated processes HMRC currently uses have been in place for many years and assist HMRC to manage the collection of taxes in the most efficient and cost-effective way.
Detailed proposal
Operative date
This measure will apply both prospectively and retrospectively. Although this measure applies retrospectively, it does not introduce any new or additional obligations or liabilities.
Current law
The current law is contained in:
- s8, s8A, s9ZB, s12AA, s30A and s100 of the Taxes Management Act 1970
- paragraph 3 of Schedule 18 to Finance Act 1998
- paragraphs 2 and 3 of Schedule 14 to Finance Act 2003
Proposed revisions
The government will legislate in Finance Bill 2020 to make it clear that certain functions attributed to an officer may be carried out by HMRC using an automated computer process or other means.
Summary of impacts
Exchequer impact
| 2019 to 2020 | 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
This measure has no direct impact on individuals as it affirms that automated statutory notices are and always have been fully authorised by tax administration law. It will have no effect on individuals who are issued with an automated notice to file a self-assessment tax return or on individuals issued with an automated late filing penalty notice. Customer experience is expected to stay the same as there is expected to be no change to individuals’ experience. There is expected to be no impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts on groups sharing protected characteristics. Support is available for all customers who need extra help to deal with their tax and benefit affairs.
Impact on business including civil society organisations
This measure has no direct impact on businesses or civil society organisations as it affirms that automated statutory notices are and always have been fully authorised by tax administration law. Payment and reporting processes are not affected by this measure, which is intended to affirm the law in respect of automated processes. Customer experience is expected to stay the same as there is expected to be no change to businesses experience.
Operational impact (£million) (HMRC or other)
There is no operational impact. HMRC systems will remain unchanged. This measure is intended to affirm HMRC’s application of tax law.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be monitored through information collected from data on appeals and reviews.
Further advice
If you have any questions about this change, contact Carol Beardsley, Tax Administration Policy & Strategy team on telephone: 03000 557390 or email: carol.beardsley@hmrc.gov.uk.