Stand By For Digital Tax

August 30, 2016 by in category Blog tagged as , , , , , , with 0 and 49

HMRC’s 2020 vision sees digital tax replacing annual tax returns

Digital Tax blog image

Put That Pen Away: digital tax is set to be the only game in town by 2020, subject to a consultation by the HMRC. Image by Aleksandra Gigowska (via Shutterstock).

There are several things in life that are inevitable, with death and taxation to name a few. Following on this month’s consultation period by HMRC, digital tax payments is a possible addition. HM Revenue and Customs wishes to make taxation digital.

Under the banner of Making Tax Digital, there are six digital tax consultation documents:

  • Making Tax Digital: Bringing Business Tax Into the Digital Age;
  • Business Income Tax: Simplifying Tax for Unincorporated Businesses;
  • Business Income Tax: Simplified Cash Basis for Unincorporated Property Businesses;
  • Making Tax Digital: Voluntary Pay As You Go;
  • Making Tax Digital: Tax Administration;
  • Making Tax Digital: Transforming the Tax System Through The Better Use of Information.

The foundations of HMRC’s 2020 vision sees the extension of Digital By Default techniques (as used by the DWP’s Universal Credit system). Of late, digital payment options for annual tax returns have been implemented. By 2020, it will be possible to view your PAYE record on your PC. Ultimately, their approach to digital tax means being able to see your tax records – PAYE and self-employed earnings. Plus details of payments made and allowances.

Edward Troup said: “Making Tax Digital represents very significant change. It will bring the tax system into the 21st century and help make HMRC one of the most digitally-advanced tax administrations in the world.”

HMRC’s plans will see the end of the annual tax return as we know it today. Updating your tax details could become as easy as making an online shopping purchase. Paying the HMRC will be a cinch, but Mr. Troup also added:

“There is still a lot to design and develop, and it’s important that we do this hand-in-hand with our customers and their representatives; these consultations are the next step in this process.”

According to their roadmap pamphlet, 99% of businesses file their tax returns digitally. 98% of businesses do the same with Corporation Tax payments. Plans include the use of secure messaging and web chat support with HMRC staff. Some of the foundations have already been laid.

We hope the HMRC’s digital tax plan is a success but, given the previous experience of HM Government’s IT projects, we should hope for the best. Some people won’t be surprised with the HMRC proposals, following the closure of local tax offices in the last five years. Whether you choose to work with paper or digital tax returns, our chartered accountants at Peach Wilkinson shall do our utmost to help you.

To take part in the consultation, the deadline is the 07 November 2016. For further information, visit GOV.UK’s Making Tax Digital page.

Peach Wilkinson, 30 August 2016.

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