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HMRC aims for fully digital tax system by 2020. Yeah, whatever

Could we finally see the end of tax returns?

HMRC photo, Gov.uk

HMRC has fleshed out its ambitions to make its tax system fully digital by 2020, which will include nothing short of the "end of the tax return for millions of taxpayers".

The department has said that by 2016, every individual and small business will have access to their own secure digital tax account, similar to an online bank account, that enables them to interact with HMRC digitally.

From April 2018, businesses, including everyone who is self-employed and those letting out property, will update HMRC at least quarterly – where it is their main source of income.

The intention is to allow taxpayers to view their complete financial digital accounts by 2020, similar to the way people use online banking.

HMRC is joining up its internal systems, and will populate digital tax accounts with the information it holds, it said.

The department is currently in the process of migrating from its creaking £10.7bn Aspire IT contract – a move UK lawmakers have already said is extremely risky.

In the Spending Review last month, chancellor George Osborne committed £1.3bn to HMRC to "build one of the most digitally advanced tax administrations in the world".

According to the Treasury, plans to cut the department's budget by one-fifth will be offset by its digitisation plans.

However, the Office for Budgetary Responsibility has said Osborne's "making tax digital” savings remain “highly uncertain”.

David Gauke MP, financial secretary to the Treasury, said the move will bring an end to the current "bureaucratic form-filling", adding that "during this Parliament, HMRC will make fundamental changes to the way the tax system works — transforming tax administration so it is more effective, more efficient and easier for taxpayers". ®

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