HMRC investment updates

Headlines from the Budget’s support documents include:-                    

• Providing an additional £292m across three years for more resources to tackle the tax gap;
• Providing £55m next year for the Taxpayer Protection Taskforce which was previously announced at Spring Budget 2021 to expand HMRC’s compliance work whilst continuing to target those who have abused the various COVID-19 support packages provided by the Government;
• An extension to the time when Making Tax Digital is introduced for income tax self-assessment (it will apply from 6 April 2024, but 6 April 2025 for general partnerships;
• A further £136m investment to deliver a Single Customer Record and Account offering;
• A £468m investment over the next three years to modernise HMRC’s IT systems and their digital service offering
• A £277m budget to transform how HMRC procures IT services thereby allowing more opportunities for smaller businesses to compete for contracts.

More detail will emerge over the coming days but today’s announcements of further investment in a stretched and places under-resourced HMRC to tackle avoidance and evasion is welcomed. Particularly pleasing is the ability for smaller businesses to compete for contracts to support HMRC’s IT offering. 

Reform of penalties for late submission and late payment of tax for ITSA   

Announced on 23 September 2021, the new regime of penalties for the late filing and late payment of tax for ITSA will now come into effect on 6 April 2024 for those taxpayers required to submit digital quarterly updates through MTD, and 6 April 2025 for all other ITSA taxpayers.  

A new regime of penalties for VAT will come into effect for VAT taxpayers from periods starting on or after 1 April 2022, as announced at Budget 2021.

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