October 14, 2020
Article
In the March 2020 Budget, the Chancellor highlighted HMRC's 10 year strategy and the government's intention to create ‘a tax system fit for the challenges and opportunities of the 21st century’. More detail was released to back this up in July 2020, but this received little air time due to the ongoing pandemic. However, the way we interact with HMRC has changed significantly over the last ten years and looks set to change further in the next ten.
Over the last six months we have seen unprecedented changes made by HMRC in record time with the set-up of the online claim system for the Furlough and Self Employed Income Support Schemes. Whilst there may be debate about the fairness of who received support, you cannot deny that the IT systems created to deliver these support packages worked and were world class.
In the recently published report, I sense that HMRC are looking to build on this and digital services will be at the heart of how taxpayers interact with them going forward.
The report talks of resilience and effectiveness; greater ease of use and the ability for all to pay the right amount of tax at the right time. Making Tax Digital will certainly be at the heart of this and the roll-out is set to continue with all VAT-registered businesses having to comply from April 2022 and then from April 2023, businesses and landlords with business income over £10,000 per annum, which are liable for Income Tax, will need to keep digital records and use software to update HMRC quarterly through Making Tax Digital.
The recent change made in respect of Capital Gains Tax reporting is another example of HMRC’s drive towards digital services. Whilst this hasn’t worked quite a well as the COVID-19 support systems, it further demonstrates HMRC’s desire to move everything online. All tax payers therefore need to consider their position sooner rather than later and embrace the change.
The full report can be viewed here.
If you would like any further information on this, please contact me or your usual Albert Goodman contact.