Now you can file your tax return by phone
Revenue’s climbdown to help small businesses
SMALL businesses are to be allowed to file their tax returns by telephone in a climbdown over plans to force them to go online.
The Daily Mail last month highlighted the plight of millions of self-employed workers, landlords and small business owners who will now have to submit returns four times a year.
Experts said the move would add to the reams of red tape already strangling small firms – and warned that many may struggle with new digital accounts.
Two in every five self-employed workers are either unable to use the internet or need help using government services online, according to figures from HM Revenue & Customs. It was feared that many would end up having to pay large fines for missing deadlines.
But the Treasury is now watering down the proposals ahead of a debate in parliament today over the introduction of digital tax accounts.
David gauke, Financial Secretary to the Treasury, says those who really cannot ‘go digital’ will not have to and could instead file information over the phone.
This is likely to involve the person registering their account and then answering a series of questions about their affairs – such as details about their revenues and costs – to the taxman over the phone. The exact information they will be required to hand over has yet to be decided.
But there are fears that HMRC will not be able to deliver a system that will allow business owners to provide information four times a year over the phone. Last summer, it emerged that the taxman failed to answer 18million phone calls from the public in one year – more than a quarter of those it received.
Writing in the Daily Mail today, Mr gauke says: ‘going digital will not be an option for some people.
‘Businesspeople who genuinely can’t use digital tools – perhaps because they can’t access broadband, or don’t own a computer or smartphone – will be offered alternatives, like nominating someone else to update their information for them, or giving information by phone.
‘So there’s nothing for businesses to fear in this new system.’
Today’s debate in parliament comes after more than 100,000 people signed a petition calling on the government to scrap the plans.
At present, self-employed workers, landlords and small business owners have to submit their figures once every 12 months. But under the new plans they will have to provide information every three months, bringing them in line with big corporations.
By 2020 all self-employed workers and small businesses will have a tax profile online similar to an internet bank account. Treasury sources said ‘common sense will prevail’ to ensure that the switch is not ‘burdensome’ for people.
FREEING businesses from red tape and allowing them to flourish has been a central part of our long-term economic plan for Britain.
Whether it has been getting rid of pointless regulations or encouraging banks to lend, this Government is unapologetic about its support for enterprise.
We know that small businesses in particular want lower taxes. Businesspeople also want a simpler tax system. That’s why we committed to transforming the tax system at the March 2015 Budget.
I want to create something that is more effective, more efficient and easier for taxpayers. That means abolishing that dreaded annual tax return, which is what we have pledged to do by 2020.
Riding on the digital wave that has revolutionised how people do their grocery shopping, interact with friends or order a taxi, over the next four years we’ll create the most digitally advanced tax system in the world.
The new digital accounts for businesses will simplify and integrate the different information they already provide to HMRC into a simple, streamlined system. So instead of one big, onerous tax return each year, once a quarter businesses can check that the information they are collecting digitally is correct, and simply click ‘send’ to update HMRC.
This does not mean quarterly tax returns, a point I’ll be making robustly when I debate the issue in Parliament today.
I would never support a reform I thought would add extra burdens on the businesses that have driven the economic recovery. Instead, this is about making life easier for them – and saving them time and money.
These changes are a central part of a package of reforms that will save businesses £400m in accountancy fees and other costs.
Many taxpayers have told us that they want more certainty over their tax bill and access to an in-year picture of their tax position, which their new digital accounts will provide.
The scope for error will also be greatly reduced – meaning fewer businesspeople face the shock of a bigger tax bill than expected at the end of the year.
For many, the transition to the new system will be straightforward. Most businesspeople have already moved away from old-style book-keeping and, as in most other areas of their lives, are making the most of computer technology.
For those who aren’t already keeping records digitally, we’ll offer free software and clear, simple advice on how it can be used.
But I recognise that some will want time to adjust, which is why we’re introducing these reforms bit by bit, with none moving on to the new system before 2018.
We will consult widely on how the new system should operate, and invite businesses to test the new tools and give us feedback.
There’s something else that I want to make absolutely clear.
Going digital will not be an option for some people. Businesspeople who genuinely can’t use digital tools – perhaps because they can’t access broadband, or don’t own a computer or smartphone – will be offered alternatives, such as nominating someone else to update their information for them, or giving information by phone.
SO THERE’S nothing for businesses to fear in this new system. It does not mean quarterly tax returns, but instead it means the end of the annual tax return, and a simpler, easier, fairer way of doing things.
I know some taxpayers have been frustrated by their dealings with HMRC in the past. That’s why we’re investing £1.3bn to make it one of the best tax administrators in the world.
The shift to digital tax accounts for our great British businesses is a key part of that.
While we will always ensure that those who really can’t file digitally are protected and helped, it is time for the vast majority to take the opportunities that will come from leaving behind our onerous paperbased tax system, and enjoy the savings in time and money that technology offers in so many other areas of their lives.