Details of a new government unit charged with transforming tax administration for small businesses were announced today by David Varney, chairman of Inland Revenue and Customs and Excise.

The Treasury said the unit would "sit at the heart of HM Revenue and Customs (HMRC)" and "champion" the needs of small businesses.

It will aim to improve "customer experience and compliance" as well as reducing costs for both businesses and HMRC by eliminating unnecessary contact.

The Treasury said it would ensure that the development and delivery of the tax system took full account of the needs of small business.

Necessary contact would be handled "effectively, efficiently and comprehensively".

Theresa Middleton, a senior official with Revenue and Customs experience, will lead the unit.

A high-level advisory group with senior private sector representation will guide its work and ensure that HMRC "harnesses the business community’s ideas" for improved compliance at lower costs.

The group will be chaired by Dave Hartnett of the Board of Inland Revenue, and will include William Sargent, chairman of the Small Business Council and Martin Wyn Griffith, chief executive of the Small Business Service.

David Varney said: "The Chancellor has challenged us to produce very significant improvements in the way the tax system is administered for businesses, particularly small businesses. I know from my own business experience that such a transformation can only be achieved through a strong emphasis on customer focus.

"That means we need to build on existing knowledge to achieve a much deeper understanding of our business customers: listening to them and responding to their needs, rather than assuming that we know best."

Single tax return
The Treasury statement said HMRC's longer-term goal was "to enable its support and compliance staff to take a 'whole view' of each customer, tailoring the services provided and minimising the burden of compliance by providing:

• joined-up systems so that business needs to provide information only once, when possible through a single form;
  
• integrated audits covering direct and indirect taxes;
  
• a single account through which all payments and repayments may be made; and
  
• streamlined and effective support and access to information in a way that better suits small business customers, including more effective use of information technologies and the internet.

This longer-term vision would require enabling legislation as well as the development of new information and IT systems and would take "a number of years" to build, the Treasury said.

"As a first step the departments will now begin consulting on the scope for a single tax return that would bring together all small business taxes.

"HMRC will be working closely with the small business team in HM Treasury to ensure that policy development is fully informed by its experience of providing services to small business customers and that gained from its compliance activities."

Further details of proposals to integrate and streamline services to small business will be published alongside Budget 2005.

Andrew Goodall
editor@taxzone.co.uk