The Chancellor, Rachel Reeves, has revealed a strong appetite for making major reforms to the UK’s tax system, starting with a review of electronic invoicing (e-invoicing) as one method to reduce retail fraud.
A new package of measures has been announced that follow on from the Chancellor’s Labour Party conference speech earlier this week.
We now know that Treasury plans for the government’s new Industrial Strategy will be complimented with a new Business Tax Road Map and a new Digital Transformation Roadmap for HMRC.
Further details are expected in the Budget on 30 October.
As part of the new package, HMRC will be launching a consultation on electronic invoicing (e-invoicing) to promote its wider use across UK businesses and government departments.
- The concept of e-invoicing follows a National Audit Office (NAO) report in September 2024 which concluded that the UK is seriously lagging in terms of its adoption of technological solutions to reduce instances of VAT and sales fraud with its Organisation for Economic Co-operation and Development (OECD) and European Union (EU) counterparts.
- HMRC’s consultation will gather input from businesses on how HMRC can support investment in and encourage e-invoicing uptake.
It has also been announced that Exchequer Secretary to the Treasury, James Murray, the minister responsible for the UK’s tax system, has become Chair of the HMRC Board.
At the Labour Party conference, Mr Murray reiterated his stated aims in the implementation of three strategic priorities for HMRC; closing the tax gap, modernising and reforming, and improving customer service. He also added that there was going to be a focus on creating stability in the tax system.
The Chancellor has further updated her announcement that new staff are expected to join HMRC’s training programme in November. An additional 200 offer letters have been issued as part of the 450 letters already sent. This is part of HMRC’s plans to recruit an additional 5,000 compliance staff to help close the tax gap.
Useful guides on this topic
UK fails to embrace tax technology
A recent National Audit Office (NAO) report compares measures adopted by other countries to reduce instances of VAT and sales fraud with the UK's approach. It reveals that the UK is seriously lagging in terms of its adoption of technological solutions.
Is a fiscal till solution the way to prevent ESS?
Over 30 countries have created and implemented so-called 'Fiscal Till Systems' to crack down on tax fraud by Electronic Suppression of Sales (ESS), but the UK shows no sign of following suit. Is the slow-burning rollout of Making Tax Digital into a direct tax to blame?
Online Platforms: ready for tax changes?
Online Digital Platform Operators that are Online Marketplaces have to register with HMRC and report details of people who sell goods and services to buyers from their platforms. This creates a new Customer Due Diligence (CDD) requirement. While HMRC is still building its new Digital Platform reporting service, online operators need to start their own CDD systems to ensure they capture and record the right data.
External links
