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.
“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?”
Katy Broomhead, KPMG Corporate Communications
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.