The Treasury’s ‘Making Tax Digital’ programme looks set to be one of the biggest and most significant changes to the tax system in years. It will make HMRC one of the most digitally advanced tax administrations in the world by introducing simple, secure, and personalised digital tax accounts. This will lead to the end of the annual tax return – a particular hassle for many at this time of year.
In March 2015, £1.3b was allocated to introducing these online tax accounts to all businesses and individuals by 2020, allowing tax affairs to be monitored and updated throughout the year, using Government-provided software and apps, thereby ending the need for an annual tax return.
In addition to saving many individuals a lot of work, this will bring huge benefits to businesses. Many businesses report that they worry about having to wait until the end of the year, or even longer, to find out how much tax they owe, and so by enabling them to update their tax accounts throughout the year, they will be able to have much more certainty about their tax position, and allow them to budget accordingly.
This policy could prevent hundreds of millions of pounds of tax loss from incorrect tax returns, give businesses and individuals more certainty about their tax bill, and save millions the worry of the annual tax return, and I will press to ensure that it is implemented on time.Follow @OliverHealdMP