George Osborne announced the introduction of digital tax accounts in his 2015 Budget, with more information being sent online to HM Revenue and Customs (HMRC) by employers, pension funds, banks and other institutions. This information will then be used to calculate individuals’ tax liabilities which may be viewed by them online. All this sounds great in theory, but many accountants expressed concerns about the reliability of this data.
We now learn that by June 2016 every individual and 5 million small businesses will get access to their digital tax account. Over the next four years HMRC expects a full range of services to be available to taxpayers through their digital tax accounts.
The next big step will be introduction of quarterly reporting of income and expenditure by businesses and landlords from 2018 according to the government.
Again we accountants have serious concerns about the timescale and lack of consultation. HMRC say “you will not need an accountant to fill out the information on the new system”. They are expecting businesses to use new Apps on their Smart phones and Tablets to transmit their data to HMRC. Most of you, I am sure, would rather spend time running your business than filling in more forms.
Please get in touch to discuss the implications of this proposed change.