Good morning to everybody, both those who are here in person, and
those who are online. Jim, thank you very much for inviting me today. I
am really delighted to be joining you in Stratford this morning. And I’m
very pleased to be attending my first HMRC Stakeholder event. I know
this is an important event in the organisation’s calendar and it’s a
great opportunity for the team to learn more about your priorities.
I wanted to talk today about some of the issues Jim has raised. The
digital modernisation work that’s underway at HMRC. But before I get
into that detail, I also wanted to share some reflections on my first
few weeks in the job and how I hope we can work together. I’m also going
to touch on the important issue of customer service.
When I started in September, I knew I had to hit the ground running.
Because there was a Budget, a Spending Review, preparations for the
Autumn Tax Administration and Maintenance Day, as well as starting to
take the Finance Bill through the House of Commons. And all of that
within the first two months.
Then there were many other aspects of my brief: The details of our
tax system, HMRC’s digital modernisation programmes – which I’ll be
discussing later - and trade and customs policy.
What I honestly didn’t expect, though, was that I would spend my
first weeks in the job learning quite a lot about false teeth! That’s
not because I’m expecting some bad outcome from my next trip to the
dentist. But it’s because, as some of you will know, there’s a measure
about the tax treatment of dental prostheses in this year’s Finance
Bill.
The point I’m making is that I’ve learned very quickly how HMRC’s
work makes a difference to every single bit of our daily lives. As a
result, I’m very aware that you, the people who support and guide
taxpayers, have an incredibly important role – both for your clients and
also for the wider economy.
I also wanted to say that I’ve been extremely impressed with all the
HMRC teams I’ve worked with so far and their efficiency, their
responsiveness and commitment to their roles.
I know that there is some very productive work taking place between
stakeholders and HMRC, through organisations like the Representative
Body Steering Group, the Administrative Burdens Advisory Board and the
Employment and Payroll Group. I’ve no doubt that these close
relationships are going to become even more critical, as we continue our
national recovery from Covid and make our way outside the EU. Because
now, more than ever we need to develop the services that will support
people, businesses and the wider economy. So I wanted to particularly
thank you for all you’ve done – particularly over the past 19 months and
all that you continue to do.
Customer Service
As I mentioned, I wanted to touch on customer service, because I know
that this is an issue that you, and others, have raised with us.
My first point here is that it’s been very apparent to me that HMRC
workers care deeply about the people and businesses they serve. I’ve
also seen how this is a highly innovative organisation brimming with
creativity and technological expertise. And we can use this ingenuity to
improve HMRC’s customer experience.
But it’s also clear that HMRC needs to get the basics right. People
need to have confidence that their calls will be answered promptly and
their letters will get a timely response. And recently HMRC hasn’t
achieved its usual high standards.
The past months’ events have played a part: HMRC had to get the
Government’s Covid-support schemes going in double quick time and keep
them running until the end of September – with all the specific customer
support work that was involved. And, of course, while the pandemic was
unfolding, HMRC was also supporting businesses through the EU Transition
Period.
These were challenging and fast-moving situations. And they meant
that HMRC had to make choices about the work it prioritised to protect
people’s livelihoods and to continue vital services, like dealing with
self-assessment returns and tax credits.
As HMRC’s Deputy Chief Executive Angela MacDonald said at last week’s
Public Accounts Committee – this is not an excuse. I know that HMRC is
very conscious that you quite rightly expect and deserve better service.
And as Angela said last week, HMRC is making progress, with service
levels expected to reach pre-pandemic standards in Spring. And I know
HMRC is focused on making sure you see change, as soon as possible. For
me this is also critically important.
Modernisation
Of course, over the longer-term HMRC’s digital modernisation
programmes will help improve service levels and in so doing build
greater trust.
There’s further benefits too - enhanced resilience, readiness to support future crises and greater compliance.
I am delighted to be taking up office at a time when much of this
work is already in train as I believe that no company and no part of
government can ignore the technological innovations that are taking
place across the globe.
As you may know around 85% of HMRC’s customer service contact is now
digitalised and 15% carried out by post and over the phone. And while
it’s right that HMRC keeps these forms of communication as an option for
those who need them – Covid-19 has underlined the need to keep up the
modernising momentum.
A clear example is the Self Employment Income Support Scheme. I think
we would all agree that it was a lifeline to millions of people during
an immensely difficult period. But with more timely data about people’s
income, we could have targeted help more precisely and provided it more
rapidly.
I want to update you on three key areas: Making Tax Digital, Real
Time Information and the Single Customer Account, that all fall within
HMRC’s digital modernisation work. Then, I’ll talk about a few other
initiatives as well.
Making Tax Digital
So turning to Making Tax Digital. As I’m sure you’re aware, this is
the first phase of HMRC’s move towards a modern, digital tax service fit
for the 21st century. I’ve no doubt it will be a real gamechanger,
helping businesses to reduce errors, giving them greater interaction and
guidance and providing the digital experience many have come to expect
in their everyday lives.
There are some longer-term advantages for businesses too – because
the integration of tax management with other business processes can
contribute to productivity gains.
As you know, Making Tax Digital for Income Tax Self-Assessment was
due to launch in April 2023. However, whilst the pandemic has
revolutionised the way businesses use technology – it’s also been
immensely challenging for many firms. So, when you told us, this was the
wrong time to impose a big change to the way businesses deal with their
tax affairs – we listened.
As a result, it’s postponed this phase’s introduction until April
2024, with general partnerships joining the following April. This extra
time will help businesses prepare, allow HMRC to test the pilot further
and allow it to deliver the most robust service possible.
HMRC is also pressing on with rolling out Real Time Information –
another central plank of its modernisation work. Just like Making Tax
Digital, Real Time Information will bring the tax system into the iPhone
age – giving people more up to date information about their tax affairs
and cutting the chance of mistakes.
Beyond this, Real Time Information has a part to play in addressing a
long-standing problem. Right now, many people pay their tax long after
the income was originally received – making it harder for them to manage
cash flow.
This year HMRC has started the conversation on this issue with a call
for evidence on timely payments and it’s just published those
responses. Again, any future changes here will be made in close
collaboration with you and with plenty of warning.
Single Customer Account
As I mentioned earlier, HMRC is innovative, however there are still
some areas of its online experience that customers can find frustrating.
And I know HMRC is working hard to eliminate these issues, through its
plans for the Single Customer Record and Account. The ambition for this
work is to provide a single point through which taxpayers can interact
with HMRC. In effect, this will mean that HMRC advisers can see what the
customer is seeing – allowing them to give tailored support.
The Single Customer Account will also help to tackle the issues some
people say they experience when trying to pay their tax online, like
being able to find log-in details for different Government Gateway
accounts. Or working their way through pages of information that doesn’t
relate to their circumstances and which can make it harder to
understand what they owe. And I’m pleased that HMRC secured funding at
the Spending Review to get this valuable initiative off the ground.
Single Trade Window
Finally, I’ll talk briefly about some of the other digital
initiatives underway. These include plans to save businesses time and
energy, when conducting their affairs at the Border through a
cross-government initiative known as the Single Trade Window.
Similar schemes have already proved successful in places like
Singapore, Sweden, the USA and New Zealand. And we think that the Window
will be a great advance for businesses here. Essentially, it will
create a single-entry point, allowing firms to lodge all their documents
and information needed to meet their import, export and transit
requirements in one place.
Ultimately the digital initiatives I’ve mentioned will boost
efficiency through fewer errors, less duplication and by improving
communications between different parts of the organisation. At the same
time, they will make it easier for those who need most to speak to HMRC
to get in touch.
Of course, some of these initiatives will require data. And, as Jim has
acknowledged, part of the future challenge for HMRC will be to make the
case of how it can harness this information to help people and make
their lives easier and to do that safely.
Tax Administration Framework
As a final point on modernisation – the work of building an HMRC
that’s fit to meet the challenges of the 21st century, needs to start at
the tax system’s foundations.
As we all know, the tax administration framework is the bedrock of
that system. The framework plays a critical role in how people
experience it and in turn the trust they place in it. Clearly, if HMRC
is to deliver the projects I’ve just mentioned, that framework needs to
change substantially.
In March, HMRC published a call for evidence on how this legislation
could be updated. I know many of you have since responded with your
thoughts and last week, at the Autumn Tax Administration and Maintenance
Day, the Government published a summary of those responses – along with
a range of other measures that will help build a better tax system.
Partnership
As I’ve outlined today, there are some great strides being made
towards creating a modern and more trusted HMRC. But digitalisation on
its own can never be the full answer. HMRC will also have to stay true
to its values of professionalism, integrity, respect.
Nor can HMRC achieve its goals alone. It needs you, its stakeholders,
to continue to share your expertise, continue to hold it to account and
continue to help it create more effective services. I’ve every
confidence that HMRC will play its part in that conversation, by
listening to you too. And as a minister I will do that as well.
Let me conclude by saying that I know that over the last few months, I
know that your interactions with HMRC have been not up to the usual
standard. As I explained earlier there are reasons for this. But I know
that Jim’s team is determined to fix these as rapidly as possible. And
for my part, I can assure you that I take a personal interest in this
matter.
However, given our subject today, I wanted to end with a few words
about HMRC’s vision for the future. In my mind, that’s a future where
it’s easier to pay and collect tax because the system works for all.
A future where people and businesses trust HMRC – to provide them with the service that they need and that they deserve.
And a future where HMRC’s modernisation work means the organisation is ready to deal with the demands of the modern world.
I’m pleased that at the Spending Review, HMRC secured funding to turn
this vision into reality. That includes money to extend Making Tax
Digital, over £136 million to deliver the Single Customer Record and
Account, and £468 million to continue modernising the tax system.
And I’ve every confidence that this modernisation work, combined with
HMRC’s immediate focus on improving customer services, will create an
organisation that can better serve this country today and tomorrow.
So I look forward to working with you and the HMRC team to achieve
all this. My door is always open to you, so don’t hesitate to get in
touch. And I’m very sure that together we can make a real difference.
Thank you very much.
