Tax Administration Research Centre

How governments administer the tax system is an issue that affects the whole of society. The body charged with this work has responsibility for collecting taxes from citizens in such a way that voluntary compliance with taxpaying obligations is maximised. Citizens should be able to trust the legitimacy of the tax administration, and be confident that they are being treated fairly and that robust actions are taken against those who fail to meet their obligations.

Indeed, how government mobilise tax revenues and spend them on public goods and services is critical for the well-being of society. When taxpayers fail to pay tax that is due on time, government tax revenues are undermined, market competition is distorted and fairness is compromised.

The world is rapidly changing producing new challenges for tax administrations. These challenges include emerging new technologies that are changing the way people and businesses interact as well as generating new sources of data for tax administrations, changing demographics such as the aging population and increasing dominance of Millennials, and increased globalisation with more movement of people and business operations across the world.

In the UK, Her Majesty's Revenue and Customs (HMRC) is responsible for administering the tax system with three strategic objectives: maximising revenues and bearing down on avoidance and evasion; transforming tax and payment for customers; and delivering a professional, efficient and engaged organisation. TARC's mission is to support HMRC, and other tax administrations, by delivering outstanding interdisciplinary research that addresses the major challenges confronting tax administrations and society at large.

Through a wide range of activities TARC has, and will continue to, considerably improved our understanding of key aspects of tax administration, including taxpayer compliance, and the way in which taxpayers interact with the tax system. TARC has an ambitious research agenda to identify where evidence gaps exist, developing rigorous research questions which can be investigated using interdisciplinary approaches.

TARC's methodologies encompass theoretical, experimental, survey, qualitative, and cross-country analyses. The Centre enhances tax administration and tax design through research that makes use of the data held by HMRC and others as well as learning from international best practices. It has embedded itself as the leading international centre with a central role in research and in building research capability in tax analysis.

TARC has a strong reputation as the focal point for a community of experts to come together and co-develop responses to the research questions and challenges posed by the modern environment.

TARC improves our understanding of key aspects of tax administration to better equip beneficiaries to deal with current challenges through co-production of knowledge. TARC has an extensive network of collaborators and research users with whom it interacts regularly at all stages of knowledge production.

Beneficiaries of TARC research - relationships already established:
Tax authorities - responsible for administering the tax system efficiently, specifically:
UK tax authorities: HMRC, Revenue Scotland, Welsh Revenue Authority;
Other tax authorities: e.g., Bulgaria, Greece and New Zealand.

Tax Practitioners - tax practitioners comprise those who work within society to help manage the interaction between taxpayers and the tax authority, specifically:
Accountants and lawyers working in advisory firms;
Professional bodies who guide regulate the activities of tax practitioners, such as the Chartered Institute of Taxation (UK);

Supranational bodies with an interest in tax administration: e.g. OECD (Forum on Tax Administration), International Monetary Fund, European Union (IOTA and Fiscalis group).

Tax policy makers and their advisers: policy makers are responsible for the design of the rules by which the tax system operate and are advised by economists and other social scientists, as well as practitioners.

Civil society: including the public at large and also the organisations that work towards improving society such as think tanks and NGOs. In the tax field this includes bodies and NGOs that take an interest in tax administration such as the Tax Justice Network, Oxfam and Christian Aid.

How they benefit

Tax authorities benefit from TARC research in two ways. Firstly, TARC research findings directly feed into strategic decision making with a view to improving the operations of tax authorities. There is evidence of this in HMRC and other tax authorities (e.g. Greece). By increasing understanding of various aspect of tax administration such as why taxpayers do or do not comply with the tax rules, how to better measure the tax gap, how taxpayers interact with the mechanics of filing their tax returns, tax authorities are able to recalibrate their systems and processes accordingly. Secondly, TARC research breaks new ground in terms of innovative methodologies and interdisciplinary approaches. This facilitates learning by tax authority analysts and policy makers thereby contributing to capacity building.

Tax Practitioners benefit from exposure to academic research and new developments in thinking in the field that enable them to better calibrate their interactions with clients and predict future developments that will impact on the work they do, e.g. the collaboration with Blick Rothenberg.

Supranational bodies with an interest in tax administration also benefit from exposure to academic research and new thinking, in particular the bringing together of interdisciplinary perspectives that challenge some of the orthodox assumptions of economic research that underpins their work.

Tax policy makers and their advisers benefit from TARC research findings that may lead to new policy choices informed by the knowledge of the impact that current choices have on key issues such as compliance and the efficiency of tax administration in terms of resource utilisation. Tax revenue is the lifeblood of the economy and the design and operation of the tax system is of vital importance.

Civil society: All citizens are affected by the way in which the tax system is administered, whether or not they are taxpayers, and stand to benefit from the improvements made possible by the research undertaken by TARC, e.g. the research in relation to HMRC's Making Tax Digital project that will enhance the way taxpayers interact with HMRC.