So, what’s it all about?
One of the key changes to the tax system that was announced in this year’s budget was that end of year tax returns will soon be scrapped. The new system will involve logging in to an online system which can be used any time. George Osborne has claimed that the main purpose of the change is to cut the amount of time required by 75%.
The change will come into effect from early 2016.
How will it work?
To simplify matters, and avoid the usual end of year chaos, the plan is provide taxpayers with the option to link their bank account with their tax account. The online website which will provide the ‘real-time’ service will be easily accessible on any device; computer, mobile, tablet etc. This will allow users to get their affairs in order at any point in the year, eliminating the last-minute rush.
That’s not all, by the end of the next parliament in 2020 businesses will be able to link their accounts to the new system directly, this will mean information will be kept up-to-date and relevant.
How will this benefit me?
As mentioned earlier, it should significantly cut the amount of time required to complete a tax return, but perhaps the most important benefit is the transparency between HMRC and taxpayer. On the website you will be able to see a breakdown which will show exactly how your tax is being calculated.
You will also have the option to spread costs by paying in instalments rather than one lump sum.
What about if I don’t like using technology and prefer the old system?
Not to worry, the old system will still be available and you can continue to send paper returns.
Please do not hesitate to contact us if you have any queries regarding the above.