Published on 13 July 2021

Call for evidence: Timely payment

Submissions

LITRG welcome the opportunity to respond to the Timely Payment call for evidence. This call for evidence is the start of a conversation about the benefits and challenges of the current tax payment timings and for moving to more frequent, in-year tax calculation and payment. This is part of the government’s 10 year tax administration strategy. It was published alongside a call for evidence on reform of the tax administration framework and the two documents should be read together. LITRG’s response to the tax administration framework review call for evidence can be found here.

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  • We believe the key to any new timely payments regime is to ensure maximum flexibility around any real time advance payments
  • The biggest challenge is how to ensure that any real time tax instalments are reasonably accurate – substantially overpaying in advance due to inaccurate in-year calculations could cause significant and unnecessary cash flow difficulties
  • HMRC also need to ensure they can deal with tax repayments in a timely manner as well
  • Use of third party data will need to be carefully considered when establishing real time liability – there are several issues that need to be addressed
  • Taxpayers who are digitally challenged or digitally excluded must not be forgotten in the design of any new process – new processes should be designed for all from the start. Non-digital channels must remain open to offer support to those who cannot use digital methods for managing their tax affairs.
  • The primary aim of a more frequent timely payment regime must be clear from the outside. There are tensions between principles of accuracy and simplicity.
  • Interactions must be considered – for example with student loan deductions and with universal credit

The call for evidence document can be found on GOV.UK.

The full LITRG response can be read here.

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