Digital Tax Accounts To Be Introduced From 2016

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July 10th 2020
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Digital Tax Accounts To Be Introduced From 2016

Digital Tax Accounts to replace the paper tax return being phased in from 2016.

The online tax account facility has been in consultation and testing since May 2014, but ahead of today's UK Budget it has been revealed the Government will be phasing-in the replacement of the paper tax return in 2016.

Over eleven million taxpayers and near two million small businesses are believed to file a paper return in October every year. The remainder submit their tax return using the online self assessment facility currently provided by HMRC.

The treasury believes it will transition the first five million businesses and ten million individuals to using the new tax account from next year. The advantages this brings includes being able to pay tax at the same time it is due or possibly on a monthly direct debit. This would allow the current payment on account system to be eliminated.

The full switchover won't be until 2020 for the bulk of the country to be integrated and people wishing to opt-out of the online service will continue to be able to submit using the current systems.

As part of the Government's dedication to providing more transparency to taxpayers, the online facility will be able to show full calculations in real-time. This also benefits the Governmental departments such as Work and Pensions with whom the data is correlated and allow improvements in accuracy.

We look further into how the system will work in our blog, read it here.

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