Budget 2015 – Tax Administration

Abolition of annual Tax Returns

If only the tax system was that simple!

The government has announced that it is going to enter into a consultation process whereby it aims to replace “annual tax returns” with “digital accounts”.  Given that 85% of tax returns are already filed on-line, this is not as radical a change as may first appear and should ultimately be achievable (although it is likely to take longer than the 5 year process that the government has announced today).

We welcome this proposed change, as it certainly makes sense for the government to make better use of digital technology whereby “on-line tax returns” can be pre-populated with information that HMRC already hold, such as earnings from employment (via RTI payroll reporting) and savings interest from banks.  We don’t expect any significant changes to the current tax reporting system in the short/medium term, but do anticipate that with the development (and better use) of digital technology over the longer term, the tax reporting regime will become more efficient, which can only be supported.  Whether taxpayers will be willing to take up the government’s offer of paying their tax early (via their new digital account) is another matter altogether!

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Oct 18

No events today
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