The Chancellor of the Exchequer, George Osborne, announced in his Budget 2015 speech that annual tax returns are to be phased out by 2020.
Her Majesties Revenue & Customs were revealed in an hour-long speech to show that all the tax affairs of employers, investment firms, banks and other parties are to be correlated into one singular, digital tax account.
Companies House and HMRC will streamline their process by May 2017, for those who are just registering or starting up and therefore need to sign up for taxes.
Autumn Changes from Budget 2015
Alongside this, before autumn, the government will have consulted on new payment processes that will enable tax and National Insurance contributions to be gathered through accounts of a digital nature, instead of the current self-assessment.
According to budget 2015, by mid-2016, the entire amount of 5,000,000 small businesses within the United Kingdom and the first batch of 10,000,000 individual persons will have access to their own digital tax account.
George Osborne has claimed in his budget 2015 that the move will reduce the time taken to deal with HMRC (from the current average of 40 minutes to 10 minutes per annum), meaning that documentation and receipts will no longer be required to be collected throughout the year by taxpayers.
As agreed by financial experts throughout the country, this will strike as one of the largest changes ever implemented to those who manage and pay taxes.
Opinions Split over Budget 2015’s Tax Changes
However, opinion is divided about the impending change. Some are concerned that it will in fact drive business away from accountancy firms; while others state that it would actually create more work.
Experts say the announcement “is part of the government’s push to get the tax payer to do more as HMRC’s resources continue to be squeezed by 5% cuts year on year. A change of this magnitude must be properly planned to ensure there are no problems with the roll out.
“It is imperative the public are able to embrace the move to a digital tax future if the government are to be successful in this scheme.”
Those still filing returns on paper will require support and the correct tools, with support and guidance to move over to digital, without being left behind.