Plans have been announced to bring all taxpayers into a new digital system between 2016 and 2020.
The promise is that ‘digital accounts’ will be simple, secure, personalised to the taxpayer, and accessible through the digital device of their choice. Some information needed by HMRC will enter the digital accounts automatically (eg from PAYE records). There are indications that there may be exceptions for taxpayers for whom it would be difficult, or expensive, to use the new system, but not yet what these exceptions are.
There is a move to take many taxpayers out of Self Assessment, with no need to submit any form of return. I would welcome a simplification, however I think this would be unlikely to apply to many of my clients.
There is also a promise to make systems available to tax advisers (‘agents’) whom taxpayers wish to use. As yet, these are not available.
My intention is to continue to offer an equivalent service to my clients once they undergo the compulsory move into the new system, that is, to prepare their tax returns and assist them in submitting correct information to HMRC, let them know the correct tax to pay, deal with HMRC on their behalf where they wish, and help them keep their tax up to date and plan in ways that are tax efficient. How, whether, and at what price, I can do this does depend on what online systems are in place to allow this. All contracts with clients will need to be reissued at this time depending on what is needed, and what I can offer.
Last year’s announcement that the self-employed would be asked for four submissions of information per year has been debated in Parliament and I hope there will be more detail on this soon. If and when this is brought in, this would clearly have an impact on my work patterns and volume of work. I am therefore keeping my client list but not taking on extra clients for the time being.
I am keeping as up to date as possible with developments. I have spoken to my tax-return software supplier (who wish to continue to supply software for return preparation, but do not yet know what will be required). I attended a recent update by HMRC on how tax advisers will fit into the new regime. I am considering an approach to HMRC highlighting the need for a smooth transition with full access for chosen tax advisers.