Making tax digital: Key features of the digital tax system

Key features of the digital tax system
Digital tax accounts
Digital tax accounts are already being used by many small businesses and from mid-December 2015, individuals have been able to log into their own Personal Tax Account (PTA) and check their tax information online. At the moment the services are limited to an individual:
viewing and updating their personal details;
seeing how their PAYE income tax is calculated and estimating how much tax they will owe this year;
seeing the tax effect of changes in estimated pay;
telling HMRC about changes such as to a company car or to medical insurance benefits, and making sure they are paying the right amount of tax on those benefits;
accessing forms covering taxes, National Insurance, pensions, and some aspects of benefits, with the ability to submit and track those forms online; and
finding out about Marriage Allowance entitlement, and making a claim online.
The end of the tax return
Given David Gauke's March 2015 announcement that taxpayers will be able to manage their tax affairs ‘without ever having to complete a tax return again’, taxpayers could be forgiven for thinking that their tax reporting obligations would be reduced, but as detailed above many will need to update HMRC more frequently than they currently do and it should not be forgotten that‘ taxpayers will still be responsible for ensuring their tax bills are right and telling HMRC about information that is not reported by other means’.
As a step towards the abolition of tax returns, the Finance Act 2016 includes legislation introducing ‘simple assessments’. This enables HMRC to issue a simple assessment to individuals with straightforward tax affairs, such as employees and pensioners where their PAYE income is too low for their investment income to be coded out.
Contact Ashored for help and support with Making Tax Digital.