The Chancellor boldly announced as part of Budget 2015 that it would be good-bye to the personal self-assessment tax return. No more personal tax returns – Really? How could that work?
Whilst we knew our clients would love to hear that they did not need to go through the annual process of providing us with the information to prepare and file their tax returns, we also knew that this seemed all too good to be true. The reality as you might guess is a little different.
As part of the continued move to on-line reporting the idea is that each taxpayer will have a digital account into which HMRC will download tax information that it already has. So included will be mainly employment income and pensions paid via PAYE and benefits in kind reported by employers.
Each individual will have the responsibility for logging in and checking the entries made by HMRC. They will also have to add in all other details such as dividends, rental income, investment income and pension contributions, which will then determine their tax liability.
So for the majority of taxpayers under self-assessment it seems that nothing will really change….it will still be necessary to dig out your information each year. We await details of how this will impact on filing deadlines and tax payment dates.