Regulations, as defined by the Better Regulation Task Force (now the Better Regulation Commission or BRC), are any government measure or intervention that seeks to change behaviour. Regulations are needed not only to control people's behaviour but also to give people rights. Where regulations are badly designed or overly complex, they can impose excessive costs, can be hard to understand and apply, and can stifle innovation and productivity.
Better Regulations are those that are well designed and consider all the impacts and consequences. They are accompanied by clear implementation plans and guidance, are easy to understand and do what they are meant to do and no more.
HMRC's approach, as a taxing authority rather than a regulator, is to regulate only when necessary and to simplify or deregulate wherever possible so that burdens on customers are minimised. Where new regulation cannot be avoided we work hard to ensure that all changes are developed in accordance with 5 key principles, developed in 1997 by the BRC.
Impact Assessments are the key tool for delivering better regulation. They are effectively a cost/benefit framework for developing a change ensuring all possible impacts of that change are identified and where possible, any fresh burdens are minimised.
These assessments are informed by Consultation with our customers, and are published with all consultation documents and when changes are announced. Two years after implementation, we review those assessments in Compliance Cost Reviews to check that our forecast of the impact of the change was reasonable.
Our impact assessments are now informed by our recent Administrative Burdens measurement exercise which has helped us to set new targets to reduce those burdens.
We are always keen to hear from our customers so we also have a suggestions scheme so you can send us your ideas for simplifying tax administration.