Letter to Financial Secretary to the Treasury

LITRG has written to James Murray MP, who has recently been appointed Financial Secretary to the Treasury and is now responsible for overseeing HMRC. In the letter, we:

• Call for HMRC to be adequately resourced so that taxpayers can access the support they need, particularly those who are digitally excluded, vulnerable or have more complex tax affairs. We also urge greater focus on embedding the HMRC Charter in practice and improving accountability for Charter performance. 
   
• Raise concerns about support for unrepresented taxpayers under Making Tax Digital (MTD), particularly the challenges of choosing and using commercial software. We recommend extending the current soft-landing approach to MTD penalties as more taxpayers are brought into the regime. 
   
• Support better use of third-party data by HMRC, while calling for stronger safeguards around transparency, accuracy and taxpayer rights. We believe taxpayers should be provided with copies of any third-party data relied upon by HMRC and that any new compliance powers should be proportionate and accompanied by robust protections. 
   
• Highlight the complexity of the rules for taxing the State Pension and recommend that HMRC and DWP provide annual statements showing each individual's taxable State Pension amount. We also call for a longer-term review of how the State Pension is taxed and seek further discussion on planned changes affecting certain pensioners. 

The letter also notes our concerns about the pace of HMRC's transformation programme and the short consultation periods that can make it difficult for stakeholders to provide considered, evidence-based responses