Research into the effectiveness of HMRC’s communications around the introduction of a 30-day payment window for CGT due on residential property disposals from April 2020 found taxpayers and agents in general agreement that HMRC’s guidance was overly complicated.
HMRC’s behaviour, insight and research team commissioned this research to find out more about how taxpayers look for information about CGT, how well they understand the policy change, and how they expect HMRC to communicate these changes. It involved 20 interviews of around one hour, using a mix of face-to-face and telephone. The range of interviewees included:
taxpayers making one-off disposals, whose knowledge of CGT was limited;
those making multiple disposals, such as landlords, who were generally better informed about the rules; and
intermediaries, including accountants, estate agents and solicitors.
Among these interviewees, some were considering disposing of property in the next 12 months (including some non-residents), while others had recently paid CGT.
The interviews revealed the following expectations and preferences among the various groups for channels to communicate the policy change.
Individuals without representation felt that Gov.uk is the most appropriate channel, provided the information is easily accessible. They would expect the information to be displayed prominently on the CGT home page of Gov.uk, possibly using banners and colours to highlight important information.
Taxpayers with representation would expect their agents to keep them informed. Solicitors and accountants reported that they do inform clients about CGT payment deadlines, but it was evident that some making one-off disposals had missed deadlines as a result of not being clear about their responsibilities.
More experienced property disposal taxpayers, such as landlords who file their own self-assessment returns, expected HMRC to contact them directly by email, or preferably by post, to notify them of the change.
Intermediaries were confident they would be informed about the policy change by their usual channels, which include training courses, online industry body resources and professional media. They would not expect HMRC to contact them directly.
All were given paper copies of HMRC documents to review, containing information about the CGT policy change. These documents were generally perceived to be aimed at professionals because of the liberal use of financial terminology and references to tax legislation. Although landlords had a greater ability to comprehend the documents and policy change, they felt it was overcomplicated by the style of language and quantity of text. Even the intermediaries felt the documents were over-complex and not suitable for their clients.
All believed the policy change should be communicated as soon as possible, given that the property disposal process can sometimes be lengthy and could involve complex discussions around tax with intermediaries.
The report, Capital gains tax communications research: qualitative research to understand customer behaviour and preferences for seeking information about capital gains tax, is available at bit.ly/2Nbc9UE.
Research into the effectiveness of HMRC’s communications around the introduction of a 30-day payment window for CGT due on residential property disposals from April 2020 found taxpayers and agents in general agreement that HMRC’s guidance was overly complicated.
HMRC’s behaviour, insight and research team commissioned this research to find out more about how taxpayers look for information about CGT, how well they understand the policy change, and how they expect HMRC to communicate these changes. It involved 20 interviews of around one hour, using a mix of face-to-face and telephone. The range of interviewees included:
taxpayers making one-off disposals, whose knowledge of CGT was limited;
those making multiple disposals, such as landlords, who were generally better informed about the rules; and
intermediaries, including accountants, estate agents and solicitors.
Among these interviewees, some were considering disposing of property in the next 12 months (including some non-residents), while others had recently paid CGT.
The interviews revealed the following expectations and preferences among the various groups for channels to communicate the policy change.
Individuals without representation felt that Gov.uk is the most appropriate channel, provided the information is easily accessible. They would expect the information to be displayed prominently on the CGT home page of Gov.uk, possibly using banners and colours to highlight important information.
Taxpayers with representation would expect their agents to keep them informed. Solicitors and accountants reported that they do inform clients about CGT payment deadlines, but it was evident that some making one-off disposals had missed deadlines as a result of not being clear about their responsibilities.
More experienced property disposal taxpayers, such as landlords who file their own self-assessment returns, expected HMRC to contact them directly by email, or preferably by post, to notify them of the change.
Intermediaries were confident they would be informed about the policy change by their usual channels, which include training courses, online industry body resources and professional media. They would not expect HMRC to contact them directly.
All were given paper copies of HMRC documents to review, containing information about the CGT policy change. These documents were generally perceived to be aimed at professionals because of the liberal use of financial terminology and references to tax legislation. Although landlords had a greater ability to comprehend the documents and policy change, they felt it was overcomplicated by the style of language and quantity of text. Even the intermediaries felt the documents were over-complex and not suitable for their clients.
All believed the policy change should be communicated as soon as possible, given that the property disposal process can sometimes be lengthy and could involve complex discussions around tax with intermediaries.
The report, Capital gains tax communications research: qualitative research to understand customer behaviour and preferences for seeking information about capital gains tax, is available at bit.ly/2Nbc9UE.
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