KPMG Research Shows HMRC In A Good Light

by Amanda Banks, Tax-News.com, London

13 April 2006

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KPMG's research has shown that eighty five obligations relating to dealing with forms and returns impose eighty five per cent of total costs, but that there is a large 'tail' of another 2,607 obligations that, although they only apply to a small number of businesses, collectively can cause irritation and contribute to an impression that the tax system is complex and difficult to understand.

It was announced in the Budget on 22nd March that, in line with the advice of businesses that sat on the advisory board of KPMG's research, HMRC will tackle both aspects of the burden on business, by:

• Reducing the burden on businesses of dealing with HMRC's forms and returns by at least 10 per cent over five years;
• Reducing the burden of dealing with HMRC's audits and inspections by 10 per cent over three years and at least 15 per cent over five years; and
• Establishing a new Administrative Burden Advisory Board, chaired by Teresa Graham, non-executive director of four businesses and Deputy Chair of the Better Regulation Commission, to work with HMRC on dealing with the complexity of the tax system.

Financial Secretary of the Treasury, John Healy MP, said:

"HMRC will continue to work closely with business in future to further minimise administrative burdens."

HMRC launched its Administrative Burden Measurement Exercise in September 2005 with a target of reporting its findings in March 2006. The aim of the exercise was to measure the administrative burden that HMRC regulations place on business. KPMG were appointed to undertake the research after a tendering exercise, on a contract that ran from 12 September 2005 until March 2006.

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