Osborne announces the death of the annual tax return & the April 4th panic

Instead HM Revenue and Customs will automatically collate the tax affairs of millions of Britons from employers, banks and investment firms into a single “digital” tax account which can be checked at any time online.

Whilst many will question the figure quoted by the Chancellor, he has pledged that the move will reduce the time it takes to deal with HMRC from an average of 40 minutes a year to 10 minutes.

Tax returns have long been considered an unnecessary burden for millions of people. The changes will mean that those with straightforward tax affairs will have no need to collect receipts and other documents. Only those who do not want to manage their affairs online will still have to complete a self-assessment return.

Andrew Chamberlain, Deputy Director of Policy and External Affairs at IPSE, the Association of Independent Professionals and the Self Employed, said:“A more flexible returns system to replace the current outdated model is something that we have long been calling for. Annual tax returns place a heavy burden on the self-employed who must keep accurate records over a long period of time and then compress months of expenses into one return.

“We hope that the Chancellor will make a commitment to a digital tax system which can be updated in real time as and when tax and expenses need to be logged. This would relieve the necessity of months of stringent record keeping for Britain’s 4.5 million independent professionals and make paying tax both simpler and much more accurate.”