In-Year Calculation and Payment for Income Tax Self Assessment and Corporation Tax for Small Companies

Description

In response to HMRC's Summer 2021 Call for Evidence on opportunities and challenges of timely payment for Income Tax Self-Assessment (ITSA) and Corporation Tax for small companies, respondents: • recognised smaller, more frequent payments could benefit some taxpayers, e.g., with lower incomes or newly self-employed, and • highlighted challenges around HMRC's ability to accurately, or near-accurately calculate tax in-year. In response, the government announced a voluntary In-year Calculation Proof of Concept (IYC PoC), to: • work through the challenges and mitigate respondents' concerns. • test using real-time/close to real-time data from multiple sources, to calculate and forecast in-year tax liability for ITSA customers. HMRC is, therefore, looking to work with intermediaries who can voluntarily share their customer data for IYC PoC, and participate in shaping our future model for Timely Payment. The IYC PoC, a unique collaboration opportunity, aims to: •ingest real-time / close to real-time data from multiple sources, inc. intermediaries (OECD schema aligned) •enable HMRC calculating and forecasting in real-time / close to real-time, in-year tax liability for ITSA customers using that data • model technical challenges associated with a scale model, and ultimately shape the design of future tax policy and improve ITSA customer experience. Potential intermediary benefits are: • gaining first-mover advantage by being at the forefront of HMRC's innovation on using real-time / close to real-time data to achieve in-year tax calculations • supporting the critical thinking necessary to shape the method of ingesting live data into HMRC • using the IYC PoC to generate first-hand feedback from their users on the effectiveness of in-year tax calculations and insight into whether this makes intermediary services more appealing. Potential intermediary user benefits are: • shaping HMRC's ITSA offering • reducing the risk of non-compliance through increased automation, e.g., registration or income pre-population (making tax compliance less daunting for users who might otherwise be deterred from working through an intermediary), and • providing users greater insight and understanding of their in-year tax liability in-year (making tax admin. less daunting for users who might be deterred from working through an intermediary due to admin. burden) Selected intermediaries will help: • build ingestion functionality for real-time intermediary data • test HMRC's ability to generate in-year income tax liability using real-time intermediary data Interested intermediaries should follow the instructions at Section 5. On receipt of an expression of interest, submissions will be assessed on their scale and scope, ability to provide the data required and availability to co-design intermediary and interface requirements. Our expectation is this joint-run value proposition is carried out on a pro-bono basis.