Minutes
Individuals Stakeholder Forum

12 February 2025

External Attendees:

Advice Direct Scotland	Royal Association for Deaf People
Advice NI	Royal National Institute of Blind People
Good Things Foundation	Tax Help for Older People
Low Incomes Tax Reform Group	TaxAid
Money Advice Trust	The Tax Academy CIC

1. Welcome and Introductions

Everyone was welcomed to the meeting.

2. Voluntary Sector Taxes Resolution Service (VSTRS) Expansion Opportunities

Information was given about the VSTRS and how it benefits customers. VSTRS:

support participating Voluntary and Community Sector (VCS) organisations acting on behalf of individual customers with more complex tax cases

provides both a fast-track telephone service and a secure KANA email process

make amendments in real time which increases efficiency for customers, HMRC and the VCS organisations

resolve customer tax issues whilst managing risks of unauthorised disclosure of customer data.

HMRC are looking at opportunities to expand the VSTRS and are keen to gather insight from members.

Feedback

Members spoke positively about the service and the way in which it has helped vulnerable customers, describing it as invaluable.

Members recognised that VSTRS advisers are skilled and highly competent and understand the complexity of customer cases.

Concerns were raised that the staff count in VSTRS has reduced and questioned how HMRC will manage resource if an increased workload is put their way.

Reduction in advisers has impacted the way in which member organisations are able to deliver their service, making it more challenging however it was also noted that no cases had been left unresolved.

VSTRS do not currently cover VAT or Corporation Tax issues, so this would be a useful improvement. One organisation had not needed to call about Inheritance Tax issues but didn’t realise that was covered.

3. Customer Education in HMRC

HMRC have been working on projects to help customers understand their tax and customs obligations to empower them to comply with these effectively. Our focus is to make sure that our communications and guidance helps customers:

be aware of their tax obligations and allowances

understand what this means for them personally and apply it to their circumstances

have the knowledge and confidence to act on these, get it right first time, with minimal intervention

Education will support delivery of HMRC’s strategic objectives and the Exchequer Secretary to the Treasury (XST) priorities to close the tax gap, improve our day-to-day performance and modernise the tax and customs system.

Work will be underpinned by 3 pillars of tax education:

communicating tax – interventions that raise awareness and signpost people to resources that can help them

teaching tax – interventions to build understanding, knowledge and confidence

assisting with tax – interventions that simplify or tailor content to help customers get their tax right at that moment.

Details of pilots being conducted through February and March 2025 were shared, along with priority work from now until 2026.

Members were asked for insight in relation to their customers’ priorities and needs and how we could work with them on our education offering. Any information about issues that affect citizens in localised areas also welcome.

Feedback

Many customers who contact VCS organisations are in crisis, and the priority is to try to get them out of the crisis situation first, and then help them self-serve going forward.

Where are HMRC getting their inspiration for the project from?

HMRC advised that the goal is to look at customer journeys and unpick where they are struggling, looking for gaps in what is provided to help them. Simple Assessment and small businesses are initial priorities. We want to look at what we can do proactively to help these customers by making sure awareness and understanding is there. We are still identifying priorities and scoping out our longer-term plan.

More detail was requested about tax related YouTube videos.

HMRC advised that we are currently carrying out an audit of YouTube videos with a view to look at what content is needed and then creating it. We welcome ideas from members about what we can do to improve them.

Another priority for VCS organisations is digital exclusion, as customers from vulnerable groups have difficulties accessing online systems for various reasons. HMRC need to be mindful that many customers don’t have access to these resources so customer education outside the digital space should also be considered.

Tax code notices are often very confusing for customers, for example details of tax collected on non-PAYE income, especially when there are a few changes across the year. Education on how the process works would be very helpful.

Education around cross border issues for Frontier Workers would also be helpful.

Simple Assessment is confusing for customers who often receive mixed messages from different sources about payments. Letters going out to state pensioners from Department for Work and Pensions (DWP) at the start of a tax year could alert them to a possible tax liability at the end of the year.

HMRC advised that we are also developing a piece of work around the interactive guidance focusing on the compliance journey, looking to go live at the end of March 2025. We are planning to have YouTube videos front and centre of the guidance.

4. Tax Administration Simplification

The Tax Simplification Team returned to ISF to give an update on their work, including an update on the Government’s Autumn Budget 2024 commitments for tax administration simplification.

At Autumn Budget 2024, the Government announced that it will:

simplify the tax system and take this forward as part of its 3 strategic priorities: closing the tax gap, modernisation and reform, improving customer service

announce a package of measures in spring 2025 to simplify tax administration and improve customer experience, with a focus on reducing burdens for small businesses

meet stakeholders to understand the priorities for administration and simplification, ensuring that work is driven by the views of taxpayers.

The Tax Simplification team set out the parameters they have been working with to develop proposals to simplify the tax administration system in Spring 2025.

Members discussed the type of tax administration simplification measures which would be welcomed by the group including a discussion on the benefits of simplifying the Income Tax Self Assessment criteria to ensure it is clear to taxpayers when they are obligated to make a tax return. Members also discussed the importance of a structured consultation format being built into the tax policy making process to ensure tax policy is developed as simply as possible.

5. Changes to Child Benefit and Guardian’s Allowance

Background information was shared with members prior to the meeting. Regulations to be laid on 25 February to come into force on 7 April 2025.

Child Benefit

HMRC plan to remove the requirement for young parents to have a National Insurance number to claim Child Benefit for their biological child. The change means that young parents can receive the eldest child rate rather than requiring their parent (the grandparent of the baby) or guardian to claim on their behalf at the lower subsequent child rate. Once a young parent receives their National Insurance number it will automatically be linked to the Child Benefit award.

Guardian’s Allowance

Guardian’s Allowance is an orphans benefit which a guardian can claim if they are bringing up a child whose parents have died.

In limited circumstances a guardian may be able to claim Guardian’s Allowance if there is one surviving parent.

One scenario in which Guardian’s Allowance can be claimed where there is a surviving parent is where that surviving parent was divorced from the deceased parent and is not maintaining the child.

HMRC plan to remove this scenario.

This will preserve the nature of Guardian’s Allowance as an orphan’s benefit whilst removing differential treatment where the parents of a child being claimed for were married or unmarried. Only guardians of children born to parents who were married, or civil partners, can engage this rule. Where the child’s parents had never married, whether that parent maintains the child or not, a guardian cannot be awarded Guardian’s Allowance. This gives rise to a difference in treatment. In such circumstances, maintenance from the surviving parent is more appropriate than support from Guardian’s Allowance as the child is not an orphan. This is consistent with the wider principle that parents should maintain their children.

Details about Guardian’s Allowance can be found on GOV.UK.

6. Changes to backdating of Child Benefit and Guardian’s Allowance for Refugees

The regulations will amend the provisions that allow for the extended backdating of Child Benefit and Guardian’s Allowance for refugees and individuals with section 67 leave. This will equalise the backdating rules so that all Child Benefit and Guardian’s Allowance claimants have their claim for Child Benefit backdated by up to a maximum of 3 months, irrespective of their immigration status.

7. GOV.UK One Login: update and discussion on new sign-in screen

GOV.UK One Login will provide a single straightforward and secure route for people to sign in and prove their identity across several Government services. Following the private testing phase the first HMRC customers will start using GOV.UK One Login, these will be new individual customers who do not have a Government Gateway. Migration of existing customers will happen much later.

The sign-in screen will change for all customers when GOV.UK One Login is live. 2 different versions of the screen have been shared in advance with members who were asked for their comments and concerns. The screens are still undergoing user testing and may change.

Members were advised that if a user selects a wrong option from the sign-in screen there is a failsafe built in to direct them back to make the correct decision.

Private beta testing will commence in Spring 2025 with a customer support model in place, issues will be picked up quickly by the project support team. Results from the study will give us an indication of how the journey is for customers before it moves into the public beta testing phase.

Feedback

Will customers be aware that they are involved in private beta testing?

Yes, users during the private beta phase will be recruited through an agency and will be aware that they are part of the private beta activity. When we move to public beta users only need to know that they don’t have an existing account. When they select that they need to create an account they will be directed to either One Login or Government Gateway to do this. As we progress through public beta an increasing proportion of new users will be routed to One Login.

Has any user research been carried out with customers who have sight loss? Many of those who are digitally enabled cannot get through the verification process because they do not have photo ID.

HMRC advised that during private beta testing we will be working both remotely and in usability labs with users who have various access needs.

8. Digital Transformation Roadmap – Update

Members were given updates on the Digital Transformation Roadmap shared at the previous ISF meeting in November 2024:

strategic intent continues to be that customers will self-serve where possible, but HMRC is committed to adviser-led channels where needed including for those who need additional support, are digitally excluded or have complex tax affairs

structured conversations have taken place with different audiences for research purposes, to acquire feedback and to build stronger relationships with digital leaders and other government departments

Details of the next steps in the process were given including further external stakeholder engagement, the team will return to ISF to provide more details about the roadmap as it evolves.

Members were asked for their views about our approach to developing the content for the roadmap and for suggestions about how we could increase our understanding of customers who need extra help.

Feedback

Members were pleased to hear that customers requiring extra support will be fully reflected in the roadmap. Do digitally excluded customers also fall into that bracket?

HMRC responded that the roadmap will also cover support for the digitally excluded as well as customers who need extra help.

9. Abolition of the Furnished Holiday Lettings (FHL) rules

To qualify as an FHL, properties must be available for short-term letting to the public for 210 days and actually let for 105 days or more in each tax year but not being used as a long-term let of over 31 days for significant periods. Currently rules provide beneficial tax treatment for FHLs compared to other property businesses in several key areas.

Changes to these rules were announced in the Spring Budget 2024. From April 2025 FHLs will cease to exist and former FHL properties will be subject to the same rules for tax purposes as non-FHL property businesses.

Further clarification about these changes can be found on GOV.UK.

10. AOB

ISF Action Point from meeting 14 November 2024

The only way for a customer to opt out of digital communication when their circumstances change is to log into their PTA and request removal, but this is not secure if other people need to help them do this.

Update: Our current frontline guidance states our customers need to contact us via phone or webchat to request removal of the digital option. The team will then need to make a referral to reinstate a paper option.

Next meeting:

8 May 2025