Twenty years ago next month, a little piece of digital history was made in Taunton. At A C Mole & Sons old office on Billetfield, we filed the UK’s first ever electronic personal tax return. Next day we were on the front page of the Financial Times and a new era of tax compliance had arrived. Since then we have acted as a test site for almost every new step in HMRC’s journey towards an ever-more digital world.
And next month we take another step with the launch of the pilot programme for HMRC’s Making Tax Digital (MTD) project. HMRC’s ambition is that by 2020 there will be no more tax returns. Everyone who currently files a return will have an on-line account which HMRC will “pre-populate” with information it already holds. The current system will be turned on its head – instead of the taxpayer filing and HMRC checking, HMRC will partly or completely supply the figures for the taxpayer to check on-line.
Businesses face an even bigger change. From April 2018, every business with sales – and every landlord with rent – in excess of the VAT threshold will be required to maintain their business records using apps and accounting software. They will also have to electronically file a summary of their income and expenses quarterly, with a final submission after the year end. From April 2019 all businesses and landlords with sales or rent above £10,000 will have to adopt MTD. A year later limited companies will join the programme. This will be compulsory, not optional.
For many the change will be difficult.
There has been much discussion – and disagreement – over the costs and benefits. The pilot programme will hopefully show us who is right.
But tax is not the only driver of digital change. Software and mobile technology offers information capture, storage and analysis potential that once we could only dream about. As a firm we are able to offer services that would simply not be possible without new technology.
A lot has changed over the last twenty years. A lot will change over the next twenty. We continue to play our part in this evolution. By sponsoring the Digital Innovator award, we want to ensure that one thing stays the same: Taunton being a leader of digital innovation.