Tax Returns no more..

In his last budget before the General Election, Chancellor George Osborne raised some interesting points yesterday.

As someone delivering tax compliance services to clients the headline grabbing statement “Annual Tax Returns to be abolished” proved to be of particular interest to me.

It appears the use by HMRC of digital services will be promoted further with a view to taxpayers uploading their relevant tax information “as they go” thus eliminating the requirement to submit an annual Tax Return.

It is envisaged that taxpayers will have a digital account and be able to access a real-time view of their tax affairs and see how their tax is calculated. The account will provide details of tax owed or tax due to be repaid and payments can be made accordingly.

HMRC will automatically use the information it holds, along with new data from third parties, to populate the digital accounts. Information from PAYE records and interest figures from banks will automatically be uploaded. Those with complex tax affairs will be able to tell HMRC about additional income online and have it reflected in their digital tax account

Taxpayers will then simply log-in and confirm that their details are complete and correct.

Small businesses who pay more than one tax (such as corporation tax, VAT and Pay-As-You-Earn (PAYE) will be able to take a single view of their total liabilities across all taxes and pay the tax they owe without having to give HMRC information it already holds.

For businesses, HMRC and Companies House will be streamlining the process to register a new company and sign up for a range of taxes by May 2017. This will remove the need for companies to provide the same information more than once.

Individuals and small businesses will have the option to ‘pay as you go’ to help manage their cash flow, so they won’t be faced with a one-off bill later.

HMRC promise the new accounts will offer access to help and support for individuals and small businesses, increasingly tailored to their specific needs and circumstances.

Doing things online is the way of the future and must be embraced but there is and will be for the foreseeable future a sector of society who are not comfortable with any more of their private information floating in the cloud and those who do not have the facilities to submit tax information online.

Access to a computer aside a simplified method of submitting tax information does not imply a simplified set of tax rules and while the UK tax system remains notoriously complicated there remains a need for professional tax agents to assist in the reporting process and taxpayers will be able to let agents manage their digital account on their behalf if they wish.

[info]

For More Information Contact:
Julie McMahon
Mobile: 07841 920094
Direct Dial: 0141 530 2021
Email: jmcmahon@gilsongray.co.uk

[/info]

The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.