The government has announced the introduction of a new digital system whereby you will be able to manage your own tax accounts online. Exchequer Secretary, David Gauke, said that the idea is that people should be able to manage their tax affairs just as they manage their bank accounts online.
The £200m investment in the new system will allow HMRC to provide a service ‘fit for the twenty-first century.’ It will also reduce HMRC costs and save around £51m of taxpayers’ money in the first year of its operation, with the savings continuing from then, of course.
What it Means for SMEs
It should reduce the time and effort you and your bookkeepers have to expend on tax compliance and increase the time you have to focus on developing your business, because there will be much less paperwork and bureaucracy.
By 2015/16, as a small business, you should be able to view your organisation’s tax calendar and receive digital alerts, and have access to all your online transactions; get answers to questions online, and supply information needed by HMRC without using snail mail or phone calls; access cross-border information where needed, and interact digitally with HMRC. According to David Gauke, all this should give you more control over your tax affairs and more flexibility in how you manage them.
What it Means for Individuals
As a personal self-assessment tax payer, you will be able to receive correspondence from HMRC online at your account, and carry out many more transactions. The government announcement reports that the services will include updating your personal details and reporting changes in circumstances and extra sources of income; accessing your tax codes and how they were arrived at; dealing with the important issue of repayments yourself at your convenience. When retirement is looming, you will also be given access to targeted online support.
The HMRC View
The online services currently available have proved increasingly popular. Over 82% of self-assessment taxes were filed and paid online in January 2013, with much of the filing performed by outsourced bookkeepers.
The new service should do much to alleviate criticism about the time it currently takes to receive a response to telephone queries with HMRC. The Chief Executive of HMRC, Lin Homer, is delighted to have secured the investment to transform the current digital services, saying that her department is, ‘committed to doing business with our customers in the way they want to do it.’