HM Revenue & Customs has stated its aim that within the next four years, tax reporting should become almost entirely digital.
What should make this possible is that much of the information which taxpayers currently enter on their tax returns is being accessed directly by HMRC from the people making the payments, so that returns will in future be substantially pre-populated.
Sources will include not only employers but also banks and building societies and government agencies, such as the Department of Work and Pensions. Rental income from buy-to-let properties and profits from on-line trading via the likes of eBay may also be included.
A benefit to taxpayers will be that, in the same way as with on-line bank accounts, they will be able to obtain a complete picture of their tax position at any time. The downside for small businesses, including landlords and the self-employed, is that as from 2018, they are to be required to up-date HMRC via the on-line system at least once a quarter
The first step is to sign up for on-line self- assessment via www.hmrc.gov.uk
