By Ken Maggs, Moore Thompson
A record number of almost 90 per cent of self-assessment taxpayers who filed their return to HM Revenue & Customs (HMRC) by midnight on 31 January did so online, with only 11 per cent sticking to the old paper returns.
Some 9.24 million taxpayers completed their self-assessment form via HMRC’s website, meaning that only 1.14 million returns were filed on paper before an earlier deadline. Meanwhile, some 870,000 returns were not received by the deadline, so those who failed to get them in on time will now face financial penalties.
However, although taxpayers appear to have embraced the digital return, critics are becoming increasingly concerned abut HMRC’s ambition to “fully digitise” the tax return system, claiming that vulnerable groups will be penalised for not wanting to use the internet.
They also predict that the quantity of data sought by the taxman will increase administrative costs and that the trend to push everything online will result in far more tax investigations without necessarily raising extra revenue. These critics also believe that HMRC’s ultimate goal is to obtain highly detailed data, which could result in more frequent and earlier demands for payment.
As far as individuals are concerned, the taxman is planning “personal tax accounts”, which are aimed at those whose financial affairs are relatively simple and don’t have an accountant. Meanwhile, small businesses, landlords and the self-employed will have to report information to HMRC quarterly. This plan has gone down badly, with 110,000 small business owners having already petitioned against the change, arguing that quarterly reporting would cost too much time and money.
However, HMRC denies that taxpayers will be forced to go digital. In a statement last year entitled Making tax digital: a myth-buster, it said that people who genuinely can’t use digital tools will be offered alternatives, such as nominating someone else to update their information for them.