The Low Income Tax Reform Group (LITRG) is calling for a “better deal” for low income taxpayers in the UK, as the “pandemic has drawn attention to some of the weaknesses of the tax system and areas in need of reform”.
In a report the group has outlined six areas that the UK government should reform which include:
- Government guidance for taxpayers to be clearer and easier to navigate
- Maintenance of easily accessible non-digital channels for ‘digitally excluded’ taxpayers to interact with HMRC
- New, simpler ways of taxing ‘gig economy’ workers to be explored
- A senior official to take responsibility for policy on agency workers and umbrella companies
- Action to ensure all low-income earners benefit from tax relief on pension contributions
- A clear mechanism for taxpayers to challenge inaccurate information held by HMRC
Moira Kelly head of the organisation stated that people at the lower end of the income scale have to deal “not only with tax”, but also with the “similarly complex welfare benefits system, which interacts with tax and other systems in difficult and often surprising ways”.
Kelly also noted that taxpayers in Scotland and Wales are increasingly having to deal with “devolved taxes and tax administrations as well as with HMRC”.
She said: “The pandemic has drawn attention to some of the weaknesses of the tax system and areas in need of reform.
“In particular, some unfortunate policy interactions – positive initiatives by one part of government counteracted by negative actions elsewhere – have highlighted the need for the government to be better joined up. It is no good plugging one gap, if another just opens elsewhere.”
She added: “The coronavirus crisis has also shown the need for government to provide people with accurate, detailed and up-to-date guidance to help them understand their rights and obligations. HMRC have worked at pace to design and implement COVID-19 support schemes which have helped millions of people.
“However, those who have contacted us have found the guidance difficult to understand and have been left confused about how all of the government offerings fit together.”