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The measure

HMRC have issued an update on delivering a new relationship with business, a process which started late in 2006 with the Varney Review of Links with Large Business. At Budget 2009 HMRC reported its progress in reducing administrative burdens both against its targets and more generally. Since 2006 it says it has implemented or committed to new measures that will deliver administrative savings to business of around £540 million each year, including £330 million from reducing the burden of forms and returns.

HMRC reports that this year's highlights include:

(1) A Budget 2009 announcement that HMRC will raise the self assessment 'Three Line Account' turnover limit to align with the VAT registration threshold from 2009-10 tax returns;
(2) Increasing substantially self-assessment online filing: 5.8 million returns (69 per cent of total) filed online by 31 January 2009 - over 50 per cent more than last year;
(3) Developing and implementing new and more proportionate ways to do our compliance checks.

For larger business the key points are:

(1) For businesses served by the Large Business Service (LBS) HMRC aim to deliver:
(a) a reduction in the number of businesses subject to enquiry - between 2008-09 and the end of 2010-11 an additional 15% of businesses benefiting from a 'low risk' relationship; and
(b) a reduction in the number of 18 month or older open issues - from the start of each year, a set percentage of issues which are then six months old or more will be settled by the end of the year:
- 2008-09 - 70 per cent
- 2009-10 - 75 per cent
- 2010-11 - 80 per cent

(2) For those large businesses served by HMRC's Local Compliance division, HMRC are developing an improved risk assessment process. Taxpayers can expect a level of interaction proportionate to risk and, for those that warrant a customer relationship manager, HMRC will work with them to become low risk. A pilot is in progress to explore options on the use of single points of contact for those large businesses that do not have a Customer Relationship Manager.

The document also notes that:

(1) HMRC Local Compliance are doing fewer checks, but have also reduced the average amount of time it spends on these cases, particularly for the types of compliance check which HMRC think businesses find the most burdensome. For example, the amount of time HMRC spend on traditional Corporation Tax and Income tax enquiries has reduced by 11.3% and 4.7% respectively.

(2) HMRC will be using an 'openness and early dialogue' approach to test whether openness about risks, and an early discussion of those risks, can reduce the time spent on compliance checks.

(3) HMRC will introduce simple compliance checks for straightforward issues identified on returns when it receives them.

(4) HMRC will reduce the burden of employer compliance checks - they will be piloting a new standard approach to employer compliance from June 2009.

(5) HMRC will trial the use of general tax practitioners (HMRC officers trained in direct, indirect tax and employer compliance) or teams of experts (depending on the size of the business) carrying out a single integrated compliance check rather than separate checks
for each regime.

Who will be affected?

All businesses.

When?

This document reflects results over the last year and plans for the next year or so.