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HMRC calls for feedback on digital tax plans

16/08/16

Sixfold consultation points to introduction of personalised digital accounts for individuals and businesses

HM Revenue & Customs (HMRC) has pitched its plans for increased digitisation of its tax services into the public realm with the launch of six consultation documents under its Making Tax Digital programme.

It said the move is aimed at making tax administration more efficient and straightforward, and will involve replacing the annual tax return for businesses with digital updates.

The move follows the presentation of a more general plan to transform the tax system in 2015 Budget, and the publication of the Making Tax Digital Roadmap last December.

The six documents cover: Bringing Business Tax into the Digital Age; Simplifying Tax for Unincorporated Businesses; Simplified Cash Basis for Unincorporated Property Businesses; Voluntary Pay As You Go; Tax Administration; and Transforming the tax system through the better use of information.

While the second and third of these are under the Business Income Tax rather than Making Tax Digital banner, the relevant plans are closely related to the increased digitisation.

Early changes

The documents include some changes from HMRC’s earlier plans aimed at easing the transition for small businesses. They include financial support for some, extra time to get used to the new requirements, and exempting firms with a turnover or gross income below £10,000 per year from keeping digital records of supplying regular updates.

HMRC highlighted the proposed move away from requiring small businesses to update it quarterly or keep their records digitally, and the creation of a system of prompts and alerts to help firms get their tax management right.

Jane-EllisonFinancial Secretary to the Treasury Jane Ellison (pictured) said: “We are committed to a transparent and accessible tax system fit for the digital age, and Making Tax Digital is at the heart of these plans. This new system will make the UK’s tax administration more efficient and straightforward, and will offer businesses greater clarity when it comes to paying their tax bills.

“By replacing the annual tax return with simple, digital updates, businesses will be able to concentrate on putting people and profit, not paperwork, first.”

Edward Troup, executive chair of HMRC, added: “There is still a lot to design and develop, and it’s important that we do this hand-in-hand with our customers and their representatives; these consultations are the next step in this process.”

The consultation is set to run until 7 November.

Image from GOV.UK, Open Government Licence v3.0

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