It’s that time of year again when the deadline for completing your self-assessment tax returns is just around the corner. Self-assessment is a system HM Revenue and Customs (HMRC) uses to collect income tax, where tax is usually deducted automatically from wages; people and businesses with other income must report it in a tax return. You have until midnight on 31st January 2016 to complete your online tax returns and pay the tax you owe. You’ll receive a penalty of £100 if your tax return is up to 3 months late.
As part of the Government’s vision to modernise the tax system, tax returns are to be replaced by digital tax accounts bringing together each taxpayer’s details into one place, just like a bank account. You can register for new services, update your information, and understand quickly and easily what you need to pay without having to complete a tax return ever again. By early 2016, five million small businesses and ten million individuals will have access to their own digital tax account. By 2020, more than 50 million individuals and small businesses will have a secure, personalised digital tax account – removing the need to complete a tax return and simplifying the system for millions. The streamlining of the process should come as a major benefit for small businesses(1).
Benefits of digital tax accounts include being able to:
- View and manage your information online in one secure place
- Paying the tax you owe without having to give HMRC information it already holds
- Link your business accounting software to your digital tax account
- Deal with your tax affairs more quickly and easily
- Simple, clear and personalised support
- Give authorised agents access to your digital tax account
Did you know?
HMRC reported a record breaking 24,546 people submitting their tax return online on New Year’s Eve, that’s a 2.8 per cent rise on figures one year ago. On New Year’s Day itself, 11,467 people sent in their tax returns with more than 600 people choosing to make this the first thing they do in 2016 between midnight and 10am. The figures also show a record number of people completing their tax return on Christmas Day with 2,044 people doing so – an increase of 13% on 2014 figures. On Boxing Day, 5,402 customers completed their tax return instead of braving the post-Christmas sales(2).