The Government’s plans to abolish the annual tax return by next year are “overly ambitious”, according to tax experts.
Chancellor George Osborne said in his Budget speech this week that from next year, millions of people will have their tax automatically managed through online accounts.
Those with the most complex tax affairs will manage their accounts online.
Osborne said: “12 million people and small businesses are forced to complete a self-assessment tax return every year. It is complex, costly and time-consuming.
“We will abolish the annual tax return altogether. Businesses will feel like they are paying a simple, single business tax – and for most the information needed will be automatically received.
“Tax really doesn’t have to be taxing, and this spells the death of the annual tax return.”
BDO partner Dawn Register says: “To announce the ‘death of the annual tax return’ is rather premature. Many individuals and businesses with complex tax affairs will want to continue filing annual tax returns for many years to come.
“The estimate that this will be introduced in 2016 seems overly ambitious given the huge amount of infrastructure that still needs to be put in place. There will also be genuine concerns about the security of IT, the ability of HMRC to get accurate data flows and how people can correct inaccuracies.”
The Association of Chartered Certified Accountants head of taxation Chas Roy-Chowdhury says: “Even for relatively simple tax returns, a lot needs to happen between now and next year for HMRC’s systems to function properly and not fall down. We need to make sure that the IT works properly and the accuracy of the information is watertight.
“Many of those filing self-assessment forms have been using the postal method for years, and need to be given access to resources to help them move the process online.”