The National Audit Office (NAO) has alerted that the UK's increasingly complex tax system is escalating administrative costs for the government and businesses by hundreds of millions. Despite an increase in tax revenue, HMRC's operational expenses surged by 15%, amounting to 4.3 billion in 2023-24. A rising number of taxpayers due to fiscal drag, coupled with limited service efficiency from HMRC, has fostered distrust among citizens. Future administrative costs are projected to rise even more, creating additional burdens as tax regulations evolve and yield greater requirements for compliance and fraud detection.
An increasingly complex tax system is burdening the government and businesses with hundreds of millions of pounds more in administration costs.
Poor levels of service meant some taxpayers and their representatives were finding it more difficult to deal with their tax matters and are losing trust in HMRC.
HMRC's administration costs for running the tax system rose by 15%, totalling 4.3bn in 2023-24, with tax revenue increasing at a similar rate.
Administrative expenses are expected to rise by a further 875m in the next few years adding to the financial burden.
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