HMRC has announced plans to overhaul the current tax system by 2020, scrapping the annual tax return and replacing it with a digital document which taxpayers can update each financial quarter.
Taxpayers will have 12 months to get used to the new system before any late submission fines are applied
In a move from the chaotic scenes every January at the tax office - It means that most businesses, landlords and the self-employed will record and pay all their taxes online rather than using the paper SA100 form.
The taxman said it was part of the government’s commitment to make the annual tax return “a thing of the past” for millions of people and businesses.
Under the government’s proposals, the Making Tax Digital project it is claimed it will save the taxman £8 billion a year, it said, because taxpayers will be getting their tax bills right first time.
Businesses, landlords and the self-employed will be able to keep track of their tax affairs digitally, updating the online document on a quarterly basis, while charities and some small businesses will be exempt from the new system.