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HRMC addresses digital concerns

Published: December 1, 2016

HRMC is seeking to reassure many businesses in the UK about the move towards a digital tax system.

In 2015, the government revealed plans to move towards a real-time tax administration to help reduce the red tape faced by companies and individuals.

The government’s plan is to oversee a completely digital tax system by 2020, with online accounting offering up-to-date tax information.

However, there has been some concerns raised by groups including the Federation of Small Businesses over the potential cost of moving towards the new system, especially for smaller firms.

Jim Harra from HMRC, in a letter to the Financial Times, has called on the UK business world to embrace the changes and understand the system will be implemented at a manageable pace.

“HMRC will not be asking anyone to file accounts five times a year, nor will we be introducing in-year quarterly payments,” said Mr Harra.

He added: “Businesses will simply send in-year updates to HMRC using information collated automatically by the same software used to record day-to-day transactions. This will help businesses pay the right amount of tax, taking away the need to put things right at a later date. Businesses already keeping their records digitally should see no additional costs at all.

“We fully recognise that this is a significant change for some businesses, which is why we’re introducing it gradually as well as exempting some of our smallest businesses, but at the heart of digital transformation is a simpler, more efficient tax system that frees business people from red tape and form-filling.”

Mitrefinch offer a number of services to help ensure payroll processes are as smooth as possible.

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