Between the upcoming Autumn Budget and the ongoing changes to Companies House, it feels like there is major upheaval being felt by businesses at the moment.
This trend is set to continue as HM Revenue and Customs (HMRC) is also undergoing a transformation as outlined in its roadmap.
With yet more changes on the horizon, we want to help you make sense of what is coming and how it will impact you.
How will HMRC change?
We have already seen some indication of the ways that HMRC plans to change its approach, most notably with the implementation of Making Tax Digital (MTD) for Income Tax.
This has been part of the modernisation of the organisation, where the digitisation of records and filings remains a key priority.
More broadly, the roadmap seeks to address five main challenges that HMRC feels hold it back.
These challenges are:
- Closing the tax gap
- Improving day-to-day performance and the overall customer experience
- Reforming and modernising tax and customs administration
- Building a high-performing organisation with a skilled and engaged workforce
- Supporting wider government economic aims through HMRC’s work
Measures being taken to improve the transparency and quality of HMRC systems are always welcome, but there is concern that some may get left behind.
As with the ongoing resistance to MTD, many feel that the digitisation is moving too quickly and leaving behind those who prefer to stick with tried and tested paper filings.
The main focus of the digitisation laid out in the roadmap is to increase the amount of customer interactions that are managed digitally from 76 per cent to 90 per cent.
While the stated goal is to reduce the error rate and close the tax gap, there is little indication that digitising a system will achieve this.
Instead, it increases the bureaucracy of those affected and ensures that you need to engage more with administrative tasks.
There is also a risk that HMRC services may be cut to the point of being effectively unusable.
Sometimes a digital service cannot provide the nuanced answers needed to complex problems and speaking directly to an agent is essential.
While HMRC claim that they would like to spend less time resolving individual issues and more time tackling fraud, it remains to be seen whether they continue to be given the resources to enable this.
Regardless of whether you agree with the shift towards digitisation, MTD for Income Tax is the most pressing change coming and you need to prepare accordingly.
We can help you get MTD ready to reduce the stress of such an upheaval.
When are the changes set to take place?
The HMRC roadmap currently indicates that while some changes can be expected in the next year, others are targets set for 2030.
The HMRC roadmap is more of a statement of intent rather than a series of concrete policies and is subject to changes over the next five years.
Still, it is helpful for business owners to understand the direction HMRC wants to go so that they can get comfortable with changing expectations.
If you are currently reticent about adopting digital systems, it might be time to work on overcoming that resistance.
We know that digital solutions may not suit everyone and if you do struggle with the pace of technology, then it is worth seeking professional help.
We can help you keep pace with any changes to HMRC and ensure that you remain compliant.
Don’t get left behind by the changes to HMRC. Speak to our team today!
