Digital tax accounts
Further step forward for e-government
A single digital tax account was announced that will encourage businesses to be more efficient and speed up the process.
The move toward ‘e-government’ was generally supported, even though it means more change for hard-pressed smaller firms.
Susannah Simpson (left), tax partner, PwC in Scotland said: “Against a backdrop of increasing tax compliance, moving to new digital tax accounts is a great step forward.
“For those taxpayers who have suffered incorrect coding notices and endless time on hold to HMRC, this digital transition will be met with optimism, even if it is a little guarded. It will also be important that for those taxpayers who, for a variety of reasons, are not able to or are uncomfortable using online systems, that there is sufficient HMRC capacity in the ‘old way of doing things’ to give them the support they need.
“Ultimately, this is about simplicity and speed – an easy-to-use digital platform for self-assessment will not only make it easier for individuals and businesses to pay taxes, it should also help save them and HMRC time and money.
“The announcement that the platform will be used to accelerate capital gains tax payments on second homes suggests this is ultimately about collecting revenue faster. But if digital tax accounts make it easier to pay tax, this should also reduce penalties for taxpayers. The tax system needs to be simplified and this is a helpful step forward.”
Andy Willox, the Federation of Small Businesses’ (FSB) Scottish policy convenor, said: “Next year, Scotland’s small employers face a lorry load of change.
“The tax credit rethink will ease some of the upward pressure on wages. But firms in important Scottish sectors will still be worried about the aggregate impact of upcoming changes to the national minimum wage and the introduction of compulsory workplace pensions.
“The Chancellor is putting his money where his mouth is on e-government – an area where progress north of the border has been achingly slow. A single digital tax account should help small firms save time and thus money.
“City deals in Scotland could unlock infrastructure investment and drive growth. But these agreements cannot be drawn up behind closed doors with little scope for local business to spot opportunities and highlight their priorities.
“Old-fashioned business rates systems across the UK aren’t fit for the 21st century. And, as serious reform in Scotland looks to be on hold until the major Westminster-led review reports, businesses north of the border may be disappointed to hear that reform in England won’t start until at least next year.”