The Government is reviewing the fundamental processes of the UK's tax system, enabling it to embrace digital technologies at its very heart, creating a system fit for the future ...
HMRC has issued a request for evidence, innocuously called 'The Tax Administration Framework: Supporting A 21st Century Tax System', but don't let the bland title fool you; TAFR could be the start of a complete overhaul of the tax system.
It encompasses legislation, process and guidance. It is looking to improve all aspects of the tax system, from how individual taxpayers get into the system to whether data could be better used to change tax assessment. TAFR may not actually change policy, but it can certainly have an impact on how policy is implemented.
The intention here is to make the tax system simpler and better to understand. It will be easier to navigate, far more flexible and able to adapt to future challenges such as another pandemic.
Taxpayers only provide HMRC with data once, and everything else is automated. If it is done correctly, situations such as Capital Gains Tax being reported on within 30-days of a property sale, then needing to be included in a self-assessment tax return will disappear.
I feel that this new future tax system will be welcomed by taxpayers, accountants and HMRC alike, but it's going to be a challenge to get right. The IT infrastructure for this alone is going to be massive. However, it's never too early to be prepared.
Ensure your bookkeeping and accounting is completely digital as soon as you can.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.