Saturday, 18 February 2017

HMRC To Bring Five Proposed Changes For UK Tax System


After HMRC announced an overhaul of the UK tax system, here is a look at five of the proposed changes that could affect you.

The changes are being introduced for some businesses from April 2018 and are expected to be phased in before 2020.

1. The end of the tax return

HMRC has signalled the end of the tax return for millions of taxpayers across the UK.

At the moment businesses, landlords and the self-employed have go through the stressful process of filling in a tax return each year.

The Government has argued that the new tax system will be “far less burdensome than the tax returns of today”.

2. Digital records

Instead of filling in a tax return, businesses, landlords and the self-employed will need to keep track of their tax affairs digitally.

This will be done through a digital tax account. Taxpayers will be able to report changes and submit information, such as income and expenditure, online.

3. Quarterly statements

Under the new system, businesses, the self-employed and landlords will have to provide updates quarterly instead of annually.

HMRC said: “Businesses, including everyone who is self-employed and those letting out property, will update HMRC at least quarterly where it is their main source of income.”

Pensioners and individuals in employment will not have to give quarterly updates unless their secondary source of income above £10,000.

4. HMRC obtains information directly

In spring 2016, HMRC will hold a consultation on how it could obtain more information directly from third parties such as banks.

The Government argues that taxpayers would no longer need to report this information, which would “reduce the reporting burden on taxpayers”.

HMRC said: “Taxpayers should not have to give HMRC information that it already has, or should be able to get from elsewhere — for instance, from employers, banks, building societies and other government departments.”

Taxpayers will be able to check the information that the HMRC has obtained through their digital accounts.

5. Overview of tax position

Many taxpayers currently have to contact different parts of HMRC to find information on all the different taxes that they pay.

But the new system will be designed to give an overview of their “overall tax position across all of their liabilities”.

HMRC said: “All taxpayers will be able to use their digital accounts to see a single, up-to-date and easy-to-follow overview of their tax affairs.”



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