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Digital tax accounts are budget centrepiece

18/03/15

Chancellor promises to abolish annual tax returns for millions - a major IT undertaking

HMRC, Whitehall London by Paul ClarkeMillions of taxpayers will have their annual self-assessment tax returns replaced by automatic uploads of information about their income under a plan announced by the chancellor of the exchequer, George Osborne, today. In his final budget speech before the general election, Osborne said that 'millions of individuals will have the information the revenue needs automatically uploaded into new digital tax accounts.'

A minority with the most complex tax affairs will be able to manage their account directly on-line, he said. He gave no details of the IT systems that would be required, but said the 'revolutionary simplification of tax collection' would begin next year.

Automatic pre-population of tax returns with data from banks and employers is well established in several leading e-government administrations. Denmark's "no touch" tax administration, at www.skat.dk, was designed more than a decade ago so that the vast majority of citizens, including the self-employed, need to approve their pre-populated tax return, usually by text. A similar system operates in Sweden, where as long ago as 2004, more than 90,000 taxpayers carried out their annual dealings with the government entirely by mobile phone.

In other budget announcements, Osborne promised "a comprehensive strategy" to stay ahead in superfast broadband. This includes investing up to £600 million to clear new spectrum bands for auction and testing "the latest satellite technology" to reach the remotest communities. "We¹ll provide funding for Wi-Fi in our public libraries, and expand broadband vouchers to many more cities, so no-one is excluded. And we¹re committing to a new national ambition to bring ultrafast broadband of at least 100 megabits per second to nearly all homes in the country," he said.

The chancellor also promised to invest in "what is known as the Internet of Things".

Introducing the budget, Osborne said that the administrative costs of central government had been cut by 40%

Pictured: HMRC by Paul Clarke © | paulclarke.com

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