The new Chancellor, Rachel Reeves, presented a dense Budget, leading with economic data as we have come to expect, but departing from the approach of some recent predecessors, she followed with tax measures and left spending announcements until last. She emphasised the supporting analysis, including a line-by-line breakdown of the £22m “hole” we have heard so much about, input from the Office of Budget responsibility and consultation with the Bank of England Monetary Policy committee, and in doing so may been aiming to draw distinctions from certain of the previous government’s approaches.
There were several announcements on HMRC and its resources, which we broadly welcome as dealing with HMRC day-to-day is often frustrating. Plans were announced for an additional 5,000 compliance staff and as well as 1,800 debt management staff. Adequate resourcing is essential for the correct functioning of the tax system, whatever the underlying policy measures, so we look forward to the telephone being answered and routine correspondence dealt with more swiftly as two.
The government will invest in IT and data systems to improve HMRC’s productivity and deliver the modern and digital service businesses and individuals expect. It is around 15 years since I first had a discussion with HMRC about technology. They have long been aware of the challenges of trying to meet user expectations and that challenge had not lessened. We are now promised investment in improvements, including pre-payment of tax via an app.
I was reflecting in the build up to the Budget 2024 that the last time that tax was seriously headline news was before the Brexit referendum, in 2015 when George Osborne was Chancellor. He developed a style whereby he saved a surprise tax announcement until last – the rabbit out of the hat that would perhaps make a headline. No such dramatic gestures from this Chancellor, who’s delivery was consistent with her headline message of “restoring stability”.
It was 2015 when George Osborne announced with a flourish that we should expect the “death of the tax return”. He pledged to “abolish the tax annual return altogether” for most individuals and small businesses. The “Making Tax Digital” project was born, seeking to create a seamless and effortless flow of timely, accurate, data from the taxpayers into HMRC. This was an ambitious goal, and there have been many setbacks since and certainly Self-Assessment is alive and well. Perhaps this IT investment will be what is needed to transform the taxpayer experience.