FCSA welcomes HMRC’s initiative to improve tax compliance through better use of third-party data but urges a cautious, collaborative approach. In its response to the consultation, FCSA highlights the need for clarity on data-sharing responsibilities, robust data governance, and safeguards to prevent misreporting. It supports HMRC’s aim to make it easier for taxpayers to pay the right tax but stresses that any system must be fair, transparent, and avoid undue burdens on businesses. The response underscores the importance of engaging industry stakeholders in shaping solutions and recommends piloting any new measures to minimise disruption. FCSA also raises concerns about potential overlaps with existing regulations and warns against placing disproportionate compliance expectations on data holders.
Overall, the submission encourages HMRC to strike a balance between efficiency and accountability while ensuring any data-sharing regime supports—not undermines—compliance and trust in the tax system.
