Plans For Simpler Online Tax System

New digital tax accounts aim to make it easier for businesses to stay on top of their tax affairs

HM Revenue & Customs (HMRC) plans to transform the tax system in the next few years by making tax digital. This aim is to create a tax system that is more efficient, more effective and easier for taxpayers.

New digital tax account

By 2020 HMRC plan to have abolished the annual tax return and replaced it with a simpler online system. The new digital tax accounts integrate the different information businesses have to provide into a simple, seamless process, from entering it in a business record keeping app through to sending it to HMRC. So instead of one big, onerous tax return each year, businesses can check that the information they are recording is correct, and simply click send to update HMRC once a quarter.

Benefits of making tax digital

  • No more end of year tax return
  • Update your tax account as you go along
  • Access your tax account at any time
  • Help you set aside money for your tax bill

Help with the new tax system

Some businesses will want time to adjust, which is why these reforms are being introduced by HMRC bit by bit, with no one moving onto the new system before 2018. And people who genuinely can’t use digital tools – perhaps because they can’t access broadband, or don’t own a computer or smartphone – will be offered alternatives, like nominating someone else to update their information for them, or giving information by phone.