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Paper tax returns will be scrapped by 2020

by LLB Reporter
18th Mar 15 9:50 am

BUDGET 2015: New digital tax accounts will save time and trouble

It’s the annual accounting annoyance that all but the most meticulous and red-tape-fanatical of us absolutely loathe.

But today it looks like the beginning of the end for paper tax returns.

George Osborne will announce in today’s Budget that individuals and businesses that submit returns will instead get “digital tax accounts” by 2020, according to reports from the BBC and The Telegraph.

HMRC will collect information relevant to tax directly from employers, banks, the Department for Work and Pensions, and pension and investment firms and pull this into the digital tax account.

Businesses and individuals will be able to pay tax at any point throughout the year or in regular instalments, rather than via the two lump sums by fixed deadlines that the current annual tax return system decrees.

The chancellor is set to promise that the new digital accounts will reduce the average amount of time spent on tax returns from 40 minutes to 10 minutes per year.

The Treasury said the current system is “complex, costly and time-consuming”.

The switch will start coming into place from next year.

Ultimately, it will help the 11 million taxpayers and 1.8 million businesses that currently fill out tax returns.

People and businesses with simple tax affairs will no longer need to collect receipts.

You will be able to check your online account at any time, and small businesses can submit accounts online.

Individuals and businesses will be able to link their accountancy software to their online account, so they won’t need to fill out a return.

 

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