Could HMRC Help Your Small Business?

For years, HMRC has been viewed as one of the more out-of-date and less approachable of government departments. Fast forward to the 21st century and with HMRC no longer wishing to be seen as such, their chief executive, Lin Homer, advises that HMRC “...has already embarked on an ambitious programme of digitisation to provide taxpayers with modern online services”. This article will be looking at the various online services currently available, and singles out those that are more relevant, but possibly unknown to Business Tax Insider (BTI) readers.

The government has a ‘vision’ for the department, namely to “reduce the costs for HMRC customers, including businesses, and help make sure that the right taxes and revenues are collected and paid”. In order to achieve this ‘vision’ the people running the organisation believe that they need to make HMRC a “more customer-focused organisation”. Notice that both quotes include the same word – “customer”, its use implying that the department is a business where the “customer” approaches the seller and is given the relevant knowledge in order to make a purchase that is correct for them; this is possibly not the manner in which HMRC has historically been viewed.

This ‘knowledge’ is becoming increasingly available not least in the many documents loaded onto the HMRC’s website. The site has in excess of 108,000 separate pages and over 200 different online services, tools and calculators. It achieves 4-6 million hits a month and approximately 11.5 million customers file one or more tax returns online every tax year. The website is currently being reviewed and although the actual text is not being rewritten the format is being overhauled prior to its being placed on the new GOV.UK website (www.gov.uk), where the websites of all government departments and many other agencies and public bodies will be placed. 

The first publications to be placed online in June 2000 were the manuals used by members of the department’s staff as their reference. These manuals were required to be published in accordance with the Freedom of Information Act 2000. However, some of the text is withheld from publication because of exemptions within the Act.

Current manuals, totalling around 300, can be found in the section of the site headed ‘Library’ www.hmrc.gov.uk/thelibrary. It is even possible to request updates of each manual as and when they are created by subscribing to an RSS feed. Under the requirement for ‘transparency’ of all government departments, an interesting ‘blog’ can be viewed showing the work of the team set up to administer the transfer of manuals to the new GOV.UK website and the problems encountered. www.hmrctransition.blog.gov.uk/2013/10/21/tracking-changes-to-manuals.

The manuals are the ‘first point of call’ for some agents, due to their technical content; however, it should be noted that they only represent HMRC’s view of the law, which can be open to different interpretation. 

Readers might not be aware of these useful documents as they are placed on the site under the ‘tag’ headed ‘Agents’ www.hmrc.gov.uk/agents/prereturn-support-agents.htm but they are something that every reader should consult. The ‘toolkits’ take the form of checklists with explanatory notes with links to online information; the idea being that their use is to help accountants and their clients to reduce errors when completing tax returns. They are supposed to give an insight into HMRC’s view on a particular subject and areas where they find that errors commonly occur. Of the 20 toolkits available, the one that might be of most interest to readers is the ‘Business Profits’ toolkit (www.hmrc.gov.uk/agents/toolkits/business-profits.pdf). 

The use of Toolkits is entirely voluntary, and as with all HMRC guidance material the views given do not have statutory force. Although there are apparently no plans to introduce ‘tick boxes’ on tax returns as proof of use, confirmation of their use might be helpful in demonstrating that ‘reasonable care’ has been taken in completion of a return, which might possibly avoid penalties, should an innocent mistake be made or HMRC take a different view on a particular item during an investigation.

The ‘manuals’ text have their own heading separate from other publications online. Other leaflets and specialist publications can be found at this address: www.hmrc.gov.uk/leaflets/index.htm.

Where HMRC can be seen to being more ‘approachable’ is in their use of social media, which has increased via the use of webinars for e-learning, emails, webinars, Twitter and YouTube videos. Applications ('apps') for smartphones have even been created, but so far only a basic PAYE calculator is available (unfortunately on the day BTI attempted its use it was ‘out of service’!):  www.gov.uk/government/news/mobile-apps).

One area that will be of interest to the newly registered self-employed is the e-learning course (intended to be the first of many) on starting your own business (www.hmrc.gov.uk/courses/syob2/syob2/index.htm).

The course covers (among other things) notification of self-employment, HMRC, NIC and VAT matters and even shows how to complete a tax return using examples of ‘screen shots’. It is rather basic, but is sufficient as a first point of call for anyone starting out in business.

A more detailed and comprehensive e-learning course can be found again under the heading of ‘Agents’. The availability of these particular courses online was prompted by requests by the professions to allow agents insight into the training that HMRC provides for its staff, an example being a course on the new penalty regime (www.hmrc.gov.uk/about/new-enalties/NPA/HTML/NPA_menu.html).

Each module is formatted as a seminar presentation screen, with concise, clear summaries shown under each of the main headings. Some of the text may not be relevant to non HMRC staff and similar to the manual text, some material is not shown, being exempt from disclosure under the same Freedom of Information Act 2000.

These courses are intentionally detailed but there is no reason why non-accountants should not view; they are set at a level of understanding of BTI readers.

Companies House already send emails reminders of impending submission dates. As all government departments are moving closer to computerisation it must surely be only a matter of time before this is also implemented for tax return submission reminders. Meanwhile, a business can enrol on a free service providing support emails tailored to their specific business (e.g. guidance on the financial records that need to be kept, when payments are due, etc: www.public-online.hmrc.gov.uk/business-emails/subscription).

BTI readers may be more inclined to view one of the hour long webinars presented live or pre-recorded (‘live’ webinars obviously being presented at set times; there are three diarised for December). The subjects covered are varied, but few – only seven in number of which possibly five would be of interest to BTI readers. An example is ‘Company directors - understanding your responsibilities to HMRC’ (www.hmrc.gov.uk/webinars/employers.htm#7).

HMRC would not be seen to be providing ’modern online services’ without the use of social media. There is a ‘Twitter’ account (having in excess of 85,000+ followers –www.twitter.com/HMRCgovuk), which regularly hosts an online ‘Questions and Answers’ session, plus there are links to ‘YouTube’ where videos can be viewed. There are currently 70 videos loaded each lasting approximately four minutes on diverse topics including advice on start-up and growing businesses, corporation tax, payroll systems and record keeping. The advice is basic, but as the presentation is not in a formal ‘teacher’ way, is still viewable.

In addition, there are Facebook (www.facebook.com/pages/HM-Revenue-and-Customs/112265072119785?rf=115563158457791) and LinkedIn pages (www.linkedin.com/company/2166?trk=tyah), and perhaps most interesting of all is HMRC’s gallery of wanted fugitives and convicted criminals in the HMRC's Flickr photo-stream: www.flickr.com/photos/hmrcgovuk)

Small business should take advantage of all the streams of advice coming out of HMRC. It even has a blog (www.hmrctransition.blog.gov.uk/category/manuals)!