Digital by Default, and Agent Services Update

1. 15.30 – 16.30 Digital by Default, and Agent Services Update Julian Hatt, John McRae, Paul Bennett HMRC www.ifa.org.uk

2. Overview of HMRC’s Digital ExemplarsIFA Conference – Birmingham17 October 2013Julian Hatt

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4. The drivers to act • Government’s ‘Digital by Default’ agenda (reflected in HMRC’s Digital Strategy) • Clear Ministerial appetite to transform our services and do more for SMEs – borne out by Autumn Statement 2012 and Budget 2013 investment • Continued need to reduce HMRC costs and do more with less • External pressure (Office for Tax Simplification, Administrative Burdens Advisory Board, business, tax profession) to make things quicker, easier and simpler for SMEs 4

5. Supporting our Customer Centric Strategy It drives revenue –digital by default services will allow us better to target interventions and manage risk on a transaction by transaction basis Shifting more contact to digital channels contributes significantly to each of HMRC’s strategic objectives. It’s cheaper – self serve allows us to theoretically shift to a ‘frictionless’ relationship, or at least towards cheaper channels. It’s better for customers – a true digital interaction is quicker, easier, and comparable with external experiences. Allows us to quickly target and segment – broadens our ability to deliver services by segment & influence behaviours (“nudge”) 5

6. How are we doing it? Focus is on user needs rather than traditional requirements Delivery is iterative (start small and grow) rather than agreeing all the detail upfront Regular user testing throughout to inform development and design Ongoing improvement and iteration of the service Delivered via more flexible design/delivery process – ‘Agile’ HMRC is committed to delivering digital services that are so good that they will be our customers’ first choice for interacting with us 6

7. The 4 Digital Exemplars • Your Tax Account • Agent Online Self Serve • PAYE Online • Digital Self Assessment 7

8. Your Tax Account

9. We already provide a range of digital services for SMEs… but we know they want to be able to do more (e.g. send/receive information) digitally… and that some of the digital services we provide (e.g. webinars, tools, etc..) can be hard to find… so we are still some way from providing the fully joined-up, integrated experience for SMEs that would allow us to have a wholly digital relationship with them Why are we doing something? 9

10. Your Tax Account A new service for business customers that makes dealing with HMRC quicker and easier Personalised and tailored to individual business needs Provides all interactions with HMRC (transactions, information, advice) in one place Designed with business customers to be as easy as possible to use Faster Clearer Simpler 10

11. “Your Tax Account” – Balancing our needs • SME customer perspective • tax is not a priority, I’m busy running my business • I want to do my taxes at a time that suits me • doing my taxes can be confusing and complex and finding the relevant help can be hard • (for the compliant majority) I do want to do the right thing, but I’m not always sure I’ve got it right • HMRC perspective • collect the right amount of tax • serve SMEs at the lowest possible cost • remove the need/desire for them to call us with simple questions or for reassurance • provide a good customer experience (for compliant customers) • move resources away from correcting error and onto evasion A win-win … Compliant SMEs want to comply with their tax obligations with the minimum possible effort and feel confident they’ve done it right. HMRC wants to deliver this (for compliant SMEs) via digital channels wherever possible in order provide a quality customer experience whilst reducing costs and errors. 11

12. What are we doing? Can see an overview of their HMRC “account”… Via their personalised homepage small business users … Can access all the help they need via links to… …with links straight to action they need to take… …tailored education… …and interactive tools taking them straight to the relevant information for them …help finding the right payment plan… Can get the answers to their questions quickly and easily …and a personalised tax calendar with digital alerts …as well as receiving tailored outbound communications from HMRC Can get direct access to all the online transactions relevant to them… …and receiving relevantkey messages from HMRC (and potentially other Government Departments) direct to their homepage …without having to wade through content that isn’t relevant to them 12

13. Sequencing We will be trialling a small-scale private ‘Beta’, which is integrated with our back-end systems, to conduct live user testing with a cross-section of SMEs – we are keen for agents to be included, as SMEs in their own right When we have refined and expanded the service in light of user feedback and usage data from the Beta trial (and ongoing user testing and research) we will make it accessible to all SMEs as the place they go to transact with HMRC Continuous process of development and enhancement of the service 13

14. … if you’ll show me yours! ||14

20. Agent Online Self-Serve [AOSS]

21. Agents • At least 8m customers use an agent to represent them – c4m individuals and 4m SMEs; 70% of businesses and 50% of ITSA individuals use an agent • Customers choose an agent because of complexity, assurance, time saving, and part of being in business, etc. • The majority use an agent for profit taxes, less so for PAYE and less still for VAT which are both regular parts of their business 21

22. Agents on the digital agenda • Autumn Statement 2012 announced ambitious digital plans, which means we need to: • know our agent population and the links with their clients’ behaviours • reduce exposure to cyber crime by bogus agents • move agents away from using paper towards transacting digitally with us • enable authorised agents to digitally see and do what their clients can see and do 22

23. Spending Review 2010 aim • Agents will be able to: • Register with us digitally • Notify us of clients digitally • View clients’ data online • Use new digital services on behalf of clients

24. PAYE Online

25. PAYE Online - Background The first online service for 41 million individuals within PAYE 60 million calls, annually, to HMRC’s contact centres 13.9m PAYE-related 4-5m of these are to query tax code 16% of these relate to car/van, fuel and medical benefits Costing customers £5 per call and HMRC £6 per call (longer calls) A Private Beta will start with changes to car/van benefits and bank interest Shift balance of the relationship away from employers and on to HMRC Currently forecasting that PAYE calls will reduce by 1.7m [12%] 25

26. Digital Self Assessment

27. Customer base Income tax on employment income Income tax on self employment income Capital gains tax Student loan repayments Charitable giving Tax reliefs and allowances Self Assessment is a mechanism that covers a diverse range of areas; The SA customer base is equally diverse including self employed, pensioners, trustees, partnerships, those with multiple employments, those with foreign income, minsters of religion and Lloyds Underwriters. Each of these can be represented by an agent. They can also file and interact with HMRC through a variety of channels – online, telephone, post. 27

28. Digital Self Assessment - Background Self Assessment is one of our flagship online services. 80% of our customers choose to file online. However, only around 25% of the customer journey takes place online. We send customers letters at every stage of the process. Despite filing with us online, we use paper to tell our customers about the outcome of their filing. This is confusing and drives low-value contact at our contact centres. 600k calls asking about repayments. 183k letters asking about letters. 28

29. What is Digital Self Assessment about? A lower cost Self Assessment system A complete, better digital experience Making it easier to understand 29

31. julian.hatt@hmrc.gsi.gov.uk Thank you Julian Hatt