What abolishing the tax return means for your business

What abolishing the  tax return means for your businessIt is nothing new for taxpayers or their agents who already use HMRC’s services to manage their tax affairs online. In fact, over 85 per cent of Self Assessment tax returns are already completed this way.

Digital tax returns to replace  tax returns announced in 2015 Budget

The Government has announced their plans to update the tax system, by replacing traditional tax returns with digital tax accounts for millions of UK individuals and businesses.

From early 2016, around five million SMEs and ten million individuals will have access to their own digital tax account and by the end of the next Parliament, every individual and SME in the country will have one. But what does this mean to you and your business?

At the moment, there is still some uncertainty as to the finer details and many sole traders and small businesses are concerned about the changes and how it will affect them.

Later this year, the government intends to publish its roadmap and further consult on the changes; some of these changes will require investment in new systems and changes to legislation.

What abolishing the  tax return means for your business

Digital tax accounts taxpayer easy guide 2015

  • Businesses and individuals will be able to view and manage their tax information online
  • Taxpayers will be able to see how their tax is calculated
  • There will be options for paying securely online
  • Taxpayers will be able to check how much tax they owe or need to be repaid online
  • Businesses with more than one tax affair – like corporation tax, VAT and Pay-As-You-Earn (PAYE) – will be able to view their total liabilities across the board
  • HMRC will already hold information on file along with third party data
  • Those who pay tax through PAYE will have their National Insurance contributions, income tax, and pension position shown in their digital tax accounts, including any interest from banks and building societies

Although it is not exactly clear yet as to the timing or the implications, we will keep you informed with all of the latest news and developments. Losing the paper does not mean that you will no longer need an accountant – looking ahead and adapting your business to deal with any changes will be the key to making the transition smoothly. HMRC will be in receipt of real time data and information, it is going to be vital to ensure that all information entered is clear, correct and validated prior to updating your digital account.

In the meantime, if you would like to contact us please click here, or request a free of charge call back from our website. We are also available for online chat via @OmnitasTax or you can join in the conversation on Facebook.