Individuals in the UK who are currently undergoing self-assessment will be given personal tax accounts. The system of online accounts, similar to personal online banking, is expected to replace annual tax returns.
These accounts allow people to view their tax details and make payments whenever it suits them. Two million businesses in the UK are currently operating with this new system and by April 2016 the government is hoping that all of the small businesses in the UK will be using the system.
These new accounts are expected to stop the backlog of owed tax, or refunds owed, at the end of each financial year.
By 2020 HMRC has stated that it would like all taxpayers, both personal and corporate to have one of these accounts. From 2018, businesses will be forced to update HMRC quarterly on the activities that bring them their main source of income. The obligation to report quarterly will also apply where the money is a secondary source of income worth more than £10,000 and the main income is from employment or from a pension.
HMRC plans to bring all the information it holds on a taxpayer into one system, including data from employers, banks, building societies and other government departments.