Budget 2015: End to paper tax returns good news for SMEs, but does it pose a technological challenge for HMRC?

Budget 2015: End to paper tax returns good news for SME

The Chancellor's plans to scrap end-of-year paper tax returns in favour of real-time digital tax accounts may prove challenging, says Samantha Vanags, tax partner for KPMG Enterprise.

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Commenting on the Chancellor George Osborne’s plans to scrap end-of-year paper tax returns in favour of real-time digital tax accounts, Samantha Vanags, tax partner for KPMG Enterprise, commented:

“This should, in theory, prompt cheers up and down the country, with none louder than those coming from the approximately 5 million self-assessing taxpayers who run their own businesses.

“However, if it’s going to be a truly reduced burden, then information will probably need to be drawn directly from accounting systems. That’s a massive technological challenge for HMRC to achieve in a relatively short space of time.

“Owner managers have long called for an end to the seemingly endless amount of form-filling and compliance with onerous red tape that typically comes with running your own business. Indeed, our own recent survey of the UK’s small and medium-sized businesses indicates that almost half of all business owners spend at least one day a week on basic administrative tasks.

“Anything which reduces this perceived ‘dead time’, allowing entrepreneurs to focus on the running and growing of their business will ultimately help drive economic growth, spur job creation and increase the competitiveness of the UK. So we want to see HMRC deliver on Mr Osborne’s ambitions for them.

“The good news is that many small businesses are already embracing innovations in digital technology to support their financial reporting, such as the use of cloud-based accounting services and digital receipt banking, so this should be an easy transition for them. But will it be as easy for HMRC?”



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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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