HMRC announces a digital PAYE system

HMRC announces a digital PAYE system

Over 30 million workers across the UK will soon be able to access their taxes easier than before as HMRC unveils its PAYE service and announces around 50 measures to transform the UK’s tax and customs system.

One of the first of the changes will be that taxpayers will be able to log into their HMRC account via the HMRC app or their personal tax accounts to update details such as their income, allowances, the reliefs they claim, and their expenses. HMRC intends this to reduce pressure on their phone services as well as cutting postal costs.

The plan is that by 2030 HMRC is hoping that 90% of taxpayer interactions will be digital, which could save them as much as £50m per year in postal costs as part of its Transformation Roadmap which has recently been published.

However, it will not be until the 2028-29 tax year that the £50m saving will be made as taxpayers transition over to a digital way of communicating with HMRC. Although, critical communication from HMRC will continue to be sent via post.

The exchequer secretary to the Treasury, has been quoted as saying: ‘By 2030, taxpayers can expect a modern and innovative HMRC with cutting-edge AI, industry-leading customer service practices, and a laser focus on delivering taxpayer value for money by ensuring everyone pays their fair share.’

Part of the plan is a biometric voice system which is going ahead so taxpayers can verify themselves when contacting HMRC.

HMRC has also announced it is launching an ‘enhanced reward scheme’ for informants of tax avoidance that will receive a percentage of the tax that is recovered at the end of any investigation.

Overall, it seems that HMRC’s intention is to incentivise taxpayers to pay the right tax on time and believes moving it to a digital first organisation is the way to do so. HMRC added that ‘those who meet their obligations and pay their tax on time should not be disadvantaged by the minority who don’t follow the rules’.