A digital revolution of the UK tax system planned by HMRC is being postponed, because tax collectors and customs officials are too busy getting ready for Brexit. Previously the taxman had been working towards a deadline of 2020 by which time traditional tax returns were supposed to be virtually redundant and replaced by digital versions. But experts have said that the delay now means this target is unachievable. In a notice sent out yesterday HMRC said the plans - which would eventually see five million taxpayers filing pre-populated self assessment forms instead of filling out blank forms - have been indefinitely put on ice. These so-called "simple assessments" were initially being introduced to make the process of filing annual tax returns easier for people with relatively small sums to declare. They would then be rolled out more widely, potentially to all self-assessment taxpayers. Despite being a paper-based system, simple assessments are part of the government’s Making Tax Digital revolution. The goal is for HMRC to use information that it already holds to calculate the amount of tax owed for taxpayers, rather than require the submission of a tax return.
HM Revenue & Customs (HMRC) has put its Making Tax Digital project on ice as it concentrates all its resources on getting ready for Brexit. Traditional tax returns were intended to be replaced by digital versions, which would have enabled five million UK taxpayers to fill out pre-populated forms by 2020. The delay is due to the need for the HMRC to free up working capacity for a new customs declaration service, which must be able to cope with a marked increase in declarations after the UK leaves the EU.