Making Tax Digital – but will it be correct?
In this, the last in a series of three articles on self-assessment, we’ll have a quick look at the impact that the Revenue’s Making Tax Digital (MTD) initiative may have for many tax payers… and I use the work “may” deliberately because the implementation dates for MTD have been pushed further into the future.
In a nutshell, Making Tax Digital is just that, the moving of all the UK tax system’s online with income tax inline to be online by 2020. HMRC has already introduced the online personal tax account which enables individuals to view and manage their tax liabilities from the comfort of their own home. Returns, which currently can still be submitted in paper form, would have to filed online under MTD. Although for most this is not a major issue some groups, such as pensioners, may get left behind by the implementation of MTD.
However, a bigger concern for us all, is the Revenue’s “simple assessment form” where a form already completed by the Revenue’s Computers is sent to the tax payer. According to HMRC, millions will benefit, as the recipients, in theory, will swiftly read, comprehend and agree the figures sent to them – and of course then pay the bill presented to them. 400, 000 such forms are due to sent out before Christmas alone. In practice though, tax practitioners are already seeing high error rates and a failure of tax payers to understand the information that is being presented to them.
In many ways simple assessment is a welcome simplification and there is enough time for the Revenue to sort out any teething problems. However, it does raise the issue that the everyday tax payer does need to understand the return they are sent so they can be sure they are paying the correct tax.
If you do receive one of these forms and have any concerns at please do contact us. A small investment in the time of a professional could mean a saving in the tax that you land up paying.