More details are gradually becoming available as to how HMRC’s new ‘digital accounts’ will work.
It is planned that every taxpaying individual and business will have online access to their own HMRC ‘account’ showing all the tax(es) they pay and enabling them to see real-time information on their tax. Information will be accessed by HMRC from banking records, PAYE records and some other sources, such as businesses’ accounting packages. This is aimed at removing the need for an annual tax return. Other benefits will include facilities to do more online, removing some of the current need for paper forms.
This move will happen between 2016 and 2020.
The majority of my clients have self-employed businesses but do not use accounting software packages to keep their business records, instead using spreadsheets, Word documents or handwritten records. For those wishing to continue as they are, it has been indicated:
-That taxpayers will be able to authorise a tax adviser to manage their digital account on their behalf if they wish
-That those who wish to continue filing an annual return will be able to do so (and at present it seems to me this would be necessary for most of my clients, unless they wished to make a move to using accounting software)
For the time being, I plan to be offering a similar service to clients, but most likely with authorised access to the new, fuller online information which clients themselves will also be able to see.
Anyone receiving a letter from HMRC concerning the new digital service/Your Tax Account/the tax ‘dashboard’, please let me know and I’d be grateful to see a copy of this.