Making Tax Easier (MTE) – HMRC’s digital initiative to modernize the tax system
The UK tax system is getting a facelift to stay in sync with the advancing technology that offers digital solutions for almost everything. The government aims at modernizing the tax system by replacing the current tax accounts with digital ones. The proposed model will be similar to an online bank account where you can register your new services and update your information and understand what you have to pay without going through the process of completing a tax return.
HMRC will utilize the information it has to link it to the taxpayers’ accounts so that taxpayers do not have to provide information that is already available with the HMRC. Simplifying the tax system through digital tax accounts can become very helpful for all the taxpayers who can pay taxes at the right time without encountering too many hurdles.
Some of the benefits outlined by HMRC are:
1. Simple, Clear and Personalized Support
Users will be able to get help and support that will be tailored according to their needs. HMRC intends to provide personalized information and guidance to the taxpayers making the entire concept more user-friendly.
2. Access to Authorized Agents
Taxpayers can give access to their digital accounts to authorized agents. This way agents will be able to handle the tax accounts with efficiently with much less paperwork.
3. Access to a wider range of Government Services
Digital accounts will eventually offer a range of other government services that will make it easy for taxpayers. Individuals will have access to their National Insurance contributions, and small businesses will also be able to find support in various ways to help their business grow.
4. Integration with your accounting software
By 2020, businesses will have the ability to link their accounting software with their digital tax accounts. They will then be able to feed data directly into the digital accounts using their accounting software.
5. View and Manage Information in One Place
Digital tax accounts will give the taxpayers the opportunity to view and manage their information in one place and see how their tax is calculated. They will be able to check their tax affairs and will also have the option to pay HMRC securely. Taxpayers will not have to provide information that HMRC already has which will save them time.
HMRC considers this to be the beginning and envisions a lot more for digital tax accounts to make taxation easy. It plans to provide 5 million small businesses and 10 million individuals with this service by early 2016. Eventually by 2020 more than 50 million businesses and individuals will have access to digital tax accounts eradicating the need to complete tax returns. This bold new vision will simplify the tax system and will make it easier for taxpayers to understand their tax affairs and pay their taxes in time.