Treasury delays its programme to digitise the tax system for two more years
The biggest changes to personal taxation in a quarter of a century are to be postponed for a further two years because the computer systems are not ready, triggering concerns that the government is set for another costly public sector IT disaster.
The Treasury is to postpone its programme to digitise the tax system — which would have forced 4.2 million self-employed workers and small businesses to file tax returns multiple times a year — from April 2024 until 2026.
In the most significant change in the programme, anyone with an annual income of more than £10,000 would have to keep accounting records digitally and then file quarterly updates to HMRC using new software, instead of the single annual update they do at present. HMRC believed this would make people declare their income more accurately and pay tax more frequently, vastly reducing the £32 billion that the department claims is underpaid in tax each year, 5.1 per cent of the country’s annual tax bill.
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