Chancellor Osborne announced in the Budget 2015 speech that the annual tax return will be phased out within five years.
The theory being that HMRC will instead collate the tax affairs of taxpayers from employers, banks, investment firms and other third parties into a single, digital tax account. For businesses, HMRC and Companies House will be streamlining the process to register a new company and sign up for taxes by May 2017.
In addition, the government will consult on a new payment process to enable tax and NICs to be collected through digital accounts instead of self-assessment.
By early 2016, all of the UK’s 5m small businesses and the first 10m individuals will have access to their own digital tax account.
The Chancellor said the move will reduce the time it takes to deal with HMRC from an average 40 minutes a year to 10 minutes. The changes will mean receipts and documents won't have to be collected by taxpayers throughout the year.
David Gauke is quoted by AccountingWeb saying that this is one of the "biggest ever changes to the way that people manage and pay their taxes".
Maybe so, but the key question is will it work and what about those with negligible access to the internet?
Views and comments welcome!
Tax does have to be taxing.
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