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Office of Tax Simplification (OTS) report on HMRC guidance

Office of Tax Simplification (OTS) report on HMRC...

The OTS has published a report on improving HMRC’s guidance for taxpayers.

Chris Davidson

Tax Director

KPMG in the UK


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On 5 October 2018, the OTS published a report that sets out its strategic vision for HMRC’s guidance for taxpayers and advisers. This is the first report by the OTS that is devoted entirely to HMRC’s guidance, demonstrating the importance of this area. It sets out a number of recommendations for HMRC, in particular around user experience, moving the emphasis towards meeting the needs of taxpayers rather than HMRC officers, and making it easier for taxpayers to find the guidance they need and clarifying the level of reliance they can place on HMRC’s guidance.

The key recommendations from the OTS report include:

  • A three-tier system for guidance, tailored to meet the needs of the majority of taxpayers, more sophisticated taxpayers and tax advisers respectively;
  • Consultation by HMRC on the circumstances in which guidance may be relied upon by taxpayers and the financial implications (interest, penalties and the disputed tax) for taxpayers where guidance is incorrect; 
  • Improved feedback processes, with feedback links provided within the guidance, and publication of an update timetable for guidance; and
  • An individual within HMRC should be appointed to take responsibility for the guidance, assisted by a panel who can support and provide context.

The recommendations are sensible and would, if implemented, greatly improve the user experience. However, they are also far-reaching and ambitious and, at a time when HMRC resource is being stretched by the demands of Brexit, even if the recommendations are accepted, significant change is probably unlikely in the near future.

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