Digital tax accounts introduced
HMRC has launched a new system of digital tax accounts which will eventually replace annual tax returns.
The new accounts will allow people to see their tax details and make payments any time during the year.
By 2020, most businesses, self-employed people and landlords will be required to keep track of their tax payments digitally.
From April 2018, businesses will have to update their records with HMRC every quarter through their digital tax accounts.
HMRC will use data collected from taxpayers to tailor the service it provides, this includes data from employers, banks, building societies and other government departments.
The new system will eventually replace annual tax returns, supporting the current system of self-assessment moving online.
During a speech to the HMRC Customs Stakeholder Conference, financial secretary to the Treasury David Gauke said:
“Taxpayers shouldn’t have to give HMRC information that it already has, or should be able to get from elsewhere – for instance, from employers, banks, building societies and other government departments.”
John Allan, national chairman at the Federation of Small Businesses, expressed concern at the move to enforce compulsory online quarterly reporting for business, saying:
“Adding more reporting appears out of step with wider Government attempts to reduce the regulatory burden and to streamline tax arrangements. Members already spend on average £3,600 completing their tax returns, with many still completing theirs manually.”
Talk to us today to discuss how these changes will affect you.