No more tax returns?
We read the news this morning, and it was confirmed a couple of hours ago, that George Osborne is planning to abolish end of year tax returns.
Before you get too excited, what does this really mean for you?
Well, what the Chancellor has actually said is that he plans to scrap end of year paper tax returns
The plan is to switch to 'digital tax accounts' by 2020 (I'm sure we'd all be happy with a 'virtual' tax bill). So in future individuals and small businesses will submit accounts throughout the year via computer, tablet or smartphone.
This move is apparently designed to end the annual rush to submit a tax return and Mr Osborne called it "a revolutionary simplification of tax collection". In future people will be able to pay their tax bill at any point throughout the year.
Taxpayers will be given a login and password so they can submit tax information regularly, making tax bills more closely related to current performance. The online accounts will show how your tax is calculated, as HMRC also updates information available to it - for example from employers, pension providers and banks.
Businesses and individuals will be able to link their own accounting software and their bank accounts to the digital tax account, removing the need to submit an end-of-year return and paying an annual tax bill in one go.
As we run a paperless office and use technology to make life easier for our clients, we think it's great that HMRC have finally arrived in the 21st century. However we're sure that it's only coincidental that this latest move means that HMRC will be able to demand tax more quickly!
If you want to kiss goodbye to boring paperwork and discover how we could make your life easier, simply email [email protected].