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HMRC revises digital transformation priorities

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HMRC has circulated details of the revised priorities for its digital transformation projects, needed principally to make room for work on upgrading customs systems in preparation for Brexit.

HMRC has circulated details of the revised priorities for its digital transformation projects, needed principally to make room for work on upgrading customs systems in preparation for Brexit. Services directly affected are simple assessment and dynamic coding, while work on a new tax credits system will stop. No further restrictions are planned on delivery of making tax digital (MTD) for business.

The statement from HMRC’s corporate communications team followed a hearing before the public accounts committee on 30 April at which HMRC chief executive Jon Thompson and his deputy Jim Harra gave an update on HMRC’s performance, including an update on the reprioritisation of its transformation programme. At the start of 2018/19, these potential change projects numbered around 267. The department has now decided to ‘stop or considerably slow down’ 39 of them to make room for additional Brexit tasks. A further 70 projects sharing similar characteristics have been consolidated, leaving HMRC with 128 current projects and ‘the capacity and capability necessary to deliver the Brexit-related projects’.

The new customs declaration service (CDS) is due to be delivered by January 2019, with a phased rollout beginning in August 2018. While CDS will eventually replace the existing customs handling of import and export freight (CHIEF) system, further work is underway to upgrade CHIEF, enabling it to run in tandem with CDS during the transition.

Mandatory MTD for businesses above the VAT registration threshold remains on track for April 2019. The voluntary pilot service was launched on 15 March. Work to create a single account for all business customers remains in scope, but will be slowed, which HMRC stresses will not affect the delivery of MTD.

HMRC will continue to encourage greater use of personal tax accounts, but will only add new services for individuals where they ‘reduce phone and post contact or deliver significant savings’.

Work on digitising services that affect smaller numbers of taxpayers, such as paying IHT, applying for venture capital schemes and PAYE settlement agreements, will be ‘paused’. Instead of a new online service for tax credits, resources will be focused on tax-free childcare and limited improvements to the child benefit system.

Planned improvements to compliance risk tools and processes will now be delivered over five years, instead of three.

HMRC’s move to 13 new regional centres will continue, although refurbishments in Newcastle will be delayed by two years and a decision has yet to be made on whether to refurbish the existing Nottingham site, or move to a new building in the city during 2020/21.

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