HMRC had issued this consultation paper in March 2015. The paper envisages that by early 2016 5 million small businesses and 10 million individuals will have access to a secure personalised digital tax account.
By 2020, more than 50 million individuals and small businesses will have a secure digital tax account, removing the need to complete a tax return. Presumably this would include the current 30 million welfare benefit claimants.
The digital tax account would enable small businesses to pay their PAYE, National Insurance, business tax and VAT in a combined real time secure digital tax account every quarter.
Another consultation is planned next year to receive views and comments from tax payers. There is only one way this system can be a win win situation. Divide the 50 million users by 4, and assign mandatory year end of March, June, September and December to each group of 12.5 million individuals and retain the annual tax due declaration that their digital tax account is true and correct to the best of their knowledge.
This way there is at least one specific day every year when the tax payer or claimant has to make a solemn declaration. Also the annual discipline is maintained while the administration costs and cash flow are spread over the entire year.
Nagindas Khajuria
By email
