In the March 2015 Budget, the Chancellor George Osborne announced the “end of personal tax returns”. He promised that tax returns will be a thing of the past, and will be replaced by a digital tax account.
Here at JacRox in Manchester, we are overjoyed that the Government is catching up with modern digital technology. Early next year the government has promised five million small businesses and ten million individuals will have access to their own digital tax account.
I can imagine some accountancy practitioners will shudder at the loss of work associated with preparing a client’s tax returns.We see things differently. We are not traditional firm of chartered accountants. We embrace technology and use it to help solve our client’s problems. We are Xero Gold practitioners, and we use Xero and the associated addons to give our clients up to date information for them to make better business decisions.
And why do I say the Chancellor borrowed from Xero? Xero works best when linked with push bank feeds from HSBC, RBS and NatWest. When these bank feeds are set up, they push and autopopulate Xero with banking information.
And that is exactly how the new digital tax account will work. It will be autopopulated with PAYE income information from RTI submissions, and bank interest details from the banks. No doubt pension income will be sent straight to the digital tax account. The automation may have teething issues when it is first implemented, but I am confident that will streamline the process of informing HMRC of your income, and enable taxpayers to manage their tax affairs online.
We embrace it, and we commend George on moving HMRC further into the cloud and join us in our online xero accounting revolution.