HMRC to scrap yearly tax return
Getting rid of the annual tax return by 2020 could save HMRC over £8bn per year, the authority has said. Under the proposals, part of its Making Tax Digital project, taxpayers will keep the Revenue updated online on a continuous basis, rather than filing a yearly return. Jim Harra, HMRC"s director general, customer strategy & tax design, said: "The appetite for digital services is growing and traditional paper-based processes make no sense in the 21st century where the vast majority use digital services. Making Tax Digital will help businesses to get their tax right first time; it will help reduce the likelihood of errors, lower the chance of unwelcome compliance checks and give them greater certainty that they are getting things right". Customers will have at least 12 months to become familiar with the changes before any late submission penalties will be applied.
However although it might save HMRC money MTD does not account of the additional costs to businesses.