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A brave new world: HMRC goes digital

You may not know it but the way in which you interact with HMRC is about to change. Soon paper forms and statements, letters and face-to-face contact at enquiry centres and elsewhere will be a thing of the past as HMRC is going digital. Over the next few years HMRC will move all of its processes online, and seek to open new digital channels of communication as it strives to achieve its target of ‘digital by default’.

In many ways this is nothing new. Most people now complete their tax returns online, and rely on the HMRC website (or increasingly GOV.UK) for advice and guidance. However, this is a drop in the ocean when you consider that in 2012/13 HMRC sent out 200 million letters and received 70 million letters in return. By swapping paper for electronic forms, guidance and communications HMRC hope to cut costs and provide an improved service that is quicker and more secure, and which meets taxpayers’ expectations.

Significant changes to HMRC’s processes are expected in the next 12 months as new services for Self-Assessment taxpayers, taxpayers within PAYE, businesses and agents are all introduced; the intention in each case being to make it easier for taxpayers to manage their tax affairs and engage with HMRC where there is a problem. A good example is Your Tax Account for Business – a new digital service which will enable the UK’s 4.9m small businesses to manage all of their tax liabilities and obligations, obtain guidance and interact with HMRC from one place.

More improvements should follow in the medium term as HMRC is able to pre-populate forms and returns, saving taxpayers time and reducing the risk of error. How much easier will it be to complete your tax return when HMRC enter your salary details and details of bank interest received for you?

The increased use of electronic reminders should make it harder to miss deadlines and new tools, such as apps and webinars, should help taxpayers better understand their liabilities and obligations.

Clearly this will take time and ‘digital by default’ will not happen overnight. We at BW Medical Accountants will do our best to keep you informed and help you make sense of the changes. However, if there is one thing to take away from this it is that things are hanging nd you should expect to receive less paper from HMRC. From now on, best check your in-box as well as your letterbox.

Stephen Relf

Stephen Relf

Tax Consultant

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