24 March 2021

OTS Consultation on Smarter Use of Third-Party Data To Conclude by 9th April

The Office for Tax Simplification (OTS) launched a taxpayer survey on 4th February 2021 alongside an existing call for evidence to assist its review of ways in which the smarter use of third-party data can make tax easier for people. Read our latest article below to find out what's being considered..

Considerations of the review

The review will look at whether the improved use of data can alleviate the need for taxpayers and agents to provide information to HMRC on tax returns which it should already have.

For example, a sole trader completing a self-assessment to declare their earnings from self-employment, will be frustrated by the need to enter details of earnings and tax paid in employment which are shown on their P60, as HMRC already has this information from the employer. A better use of this data from the employer would be to pre-populate the employment section of the self-assessment and the OTS review will look at ways in which this can be done.

A big part of the review will be to consider what principles should apply in relation to third-party data and to taxpayers in general. It will also look at which sources of third-party data would be helpful to taxpayers if HMRC received them and how to embed these aspects into the work on the single digital account and general system design.

The review will consider what might be the key priorities that HMRC should focus on, how the work can proceed in the most effective, way and what the realistic timescales would be. In a previous review, OTS considered how third-party data could be used in relation to rental and self-employment income, this review will focus on data relating to personal tax, and might include:

  • Interest from banks and building societies
  • Dividends paid from UK companies
  • Distributions from investments
  • Pension contributions
  • Gift aid payments
  • Royalties

In addition to considering what types of third-party data could be submitted to HMRC on taxpayers' behalf, the review will look at any concerns that taxpayers may have and how these could be addressed and overcome. The review will consider ways in which the information HMRC already receives can be used to assist taxpayers, rather than the provision of any new information.

The taxpayer survey is very short and simple to complete, taking less than five minutes. It asks a few questions about the respondent, their age range, and where they live, for general statistics as to where the review information has come from. The next set of questions ask for opinions on what the benefits and drawbacks of third-party data being sent to HMRC might be.

There are lists of options and the respondent can tick all which they feel apply. There is also an open box where they can write freely with any opinion they may have on the idea in general. The survey can be completed until 9th April, or alternatively, anyone who has an interest may provide a written response by email or post, also by 9th April.

In addition to surveying taxpayers, the OTS has also released a call for evidence, which should also be submitted by 9th April. OTS will require anyone responding to the call for evidence to state in what capacity they are responding, for example, as an individual, business, professional adviser, or a representative body.

The call for evidence document lists 28 questions which can be answered in response and these are split into categories. Questions one to thirteen are directed at individuals and their agents, and questions fourteen to twenty-eight are directed at potential providers of third-party data, as their views are also of interest.

The taxpayer survey call for evidence document and contact details for OTS can all be found on the HMRC website.

Questions? We can help!

Get in touch with us, let us help you! Our team of tax experts can offer business advice and help you maximise your tax efficiency. Contact our Director, Nick Bonnello, today on 0115 964 8860 or email him at nickb@rwbca.co.uk tofind out how we can help you across all areas of your business.

The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.