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Tax simplification promise from HMRC
Small businesses will have a slightly easier time dealing with their tax affairs, HM Revenue & Customs (HMRC) has promised, but it will take up to five years to achieve the necessary changes.
Reforms on the agenda include a single point of contact with HMRC, a range of flexible tax payment options, less time spent on dealing with HMRC inspections and audits, and better guidance and support.
One of the most significant changes, according to HMRC, will be the introduction of a ‘single customer record’. This will bring together all the information that HMRC holds on your business, whether for VAT, pay as you earn or taxation of business profits. You will then only need to give HMRC new information once. The benefits apparently include HMRC resolving queries more quickly.
Although the proposals are helpful, it is no surprise that taxpayers will not be the only ones to benefit. Bringing together all the information on a business will make it readily available in any HMRC enquiry. Flexible payment options will enable HMRC to chase unpaid tax more quickly.
What will not change is the complexity of the legislation that businesses have to contend with. For instance, better administration will not make it any easier for employers to work out the correct tax and national insurance treatment of many employee expenses and benefits.
Some of the simplifications made so far do no more than withdraw burdensome compliance requirements imposed by recent legislation. For example, HMRC first made all companies complete a complicated form whenever they issued shares to directors and employees, then two years later decided it was a waste of time for most new companies.
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