Tax reliefs are put in place to encourage behaviours and help specific taxpayers. As such it is very important that access to them is simple, understandable and efficient for both the taxpayer and HMRC.
Sadly, the reality can be very different. Simple ignorance of the right to claim and the sheer number of possible claims, all with their own rules and time limits, mean that many people do not obtain tax reliefs intended for them. “Money with your name on it” (as the government used to say in its tax credit publicity campaign) remains lodged firmly in HMRC’s coffers. Even when the entitlement to make a claim has been identified, it can be difficult to find out how to make the claim. Poorly designed forms can add to claimants’ woes.
Against this background of rising concern, the Office for Tax Simplification has published a report exploring how to improve the administrative process in relation to tax claims. To illustrate the scale of the problem, the list of purely flat-rate occupational expenses, appended to the OTS report, covered four pages, and this is just a minor subset of the numerous claims available in our tax system.
Many taxpayers who otherwise need no direct contact with HMRC can make, or should make, tax claims. Over five million employees made expenses claims in 2017/18. It has been estimated that about two million eligible taxpayers have failed to claim the marriage allowance. At times making these claims can feel onerous and complex, and where the amounts involved are small people may decide it is not worth the effort.
Specific issues tend to relate to online forms which cannot be saved, but which do not advise you what information you need before you start. The potential for such forms to waste time for honest, unrepresented taxpayers who simply wish to claim what is theirs is obvious. What is not obvious is why HMRC continue to design forms in this way. In addition, forms are often not designed to be accessed via mobile phones.
As if to prove what is possible, the new microsite recently introduced by HMRC enables people working from home due to Covid-19 to claim expenses. The rules have been made simple and the claim is straightforward and very easy to make. The only problem here was perhaps an initial lack of publicity so that during the first ten days only 54,000 taxpayers claimed. Not impressive given the millions who are likely to be eligible. Publicity for the £6 a week tax allowance for working from home, if your expenses are not reimbursed by your employer, is however growing.