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Budget 2015 - The end of the tax return is nigh

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18 March 2015

Following speculation already breaking before the Chancellor’s speech began, George Osborne made the headline statement that the annual tax return will be abolished, rounding off this statement with confirmation that the transition would start next year.

However, before we could book our skiing holidays for January, HMRC released what would be best described as their sales brochure, complete with a forward from David Gauke MP, explaining that during 2016, five million small businesses, along with 10 million individuals, will have access to their own on-line tax account with HMRC.

The document promises that all users will have a tailored experience, including access to all taxes affecting them, the ability to pay taxes as they go and make single payments across all their tax liabilities, no matter what their source (PAYE, VAT, income tax etc).

Importantly, the on-line account will include details of all the information which HMRC  already have at their disposal, even where provided by third parties, giving the user an up to date and “dynamic” experience of their tax affairs.  Users will even be able to upload details from their own accounting systems or provide further information, unknown to HMRC.

The proposal to consolidate all information held by HMRC in one easy to access place is welcome, but we operate in a regime of self-assessment, where the taxpayer calculates their own taxes (or appoints an expert to do it for them). Quite how this on-line platform gives the taxpayer the opportunity to interact with omissions or errors is yet to be published.  Before we pack our bags ready for an easy January we await the consultation, to be released later in the year, as to how this will be implemented and whether the annual tax return will truly be consigned to history.