We are not sure that the French expression “plus ca change” – the more it changes the more it is the same – applies to UK’s tax code.
During the next two years there are a number of changes in the pipeline that will transform (and perhaps not for the better) compliance with UK tax regulations. The major change being the move to Making Tax Digital.
Self-assessment is being shifted up a gear. By 2020, if all goes to plan, we will all have a Personal Tax Account (PTA) with HMRC, where we can see how our tax liabilities are building in real time.
As we have reported before in this blog, this will involve quarterly reporting by businesses and property rental businesses with income above a de minimis limit, presently set at £10,000. All other sources of income will be pushed to our PTA by the paying institutions: pension providers, employers, banks and other deposit takers.
Self-assessment tax returns will become a thing of the past.
If tax professionals are contemplating these changes with some trepidation, think how the impact will affect small business owners faced with four data returns each year instead of one.
We suspect that advisors will have to step up to the plate. They will need to communicate both the changes coming, and at the same time, the solutions that will enable small business owners to cope.
Later this month, we will see if Philip Hammond and his team are going to add to or change the prior directives of George Osborne. What we can be sure of, is that change has always been, and will always continue to be, the reality of the UK tax system. It would appear that it is the profession that will need to grapple with the detail, develop appropriate service solutions, and sell these to clients. Otherwise, like the dinosaurs, firms will be remembered for their fossil remains, not for their ability to move with the times; to change.