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HMRC pushes forward with paperless Self Assessment

HMRC is pushing for legislative changes so the entire Self Assessment process can be delivered online.

HM Revenue and Customs (HMRC) has published new plans that bring what it calls ‘paperless Self Assessment’ (SA) a step closer to reality.

A considerable proportion of the British workforce is required to complete tax returns – the self-employed, for instance, alongside company directors, those who earn income from investments and property, and people making more than £100,000 a year.

The "vast majority" of SA customers file their completed tax returns electronically, according to HMRC, but that doesn’t extend to the process as a whole. Because the department is required by law to send correspondence through the post instead of over the internet, just 25 per cent of these customers’ interactions with HMRC actually take place online.

Now, though, the department has decided it wants to change this and is pushing for new legislation to let it do so. The consultation document, entitled ‘HMRC Digital Strategy – legislative changes to enable paperless SA’ and published today (November 27th), details what alterations will need to be made and asks customers, tax professionals and industry bodies to comment.

HMRC’s Digital Strategy will make processes like SA faster and simpler," commented exchequer secretary David Gauke, who announced the plans. "It will deliver the tax system for the 21st century that taxpayers expect."

It’s significant that HMRC is pushing forward with a scheme to make more public-facing processes paperless, as it’s sometimes – albeit incorrectly – seen as one of the reasons that individuals and organisations are required to keep massive amounts of paperwork detailing their tax affairs.

Anyone who sends a tax return to HMRC is required by law to keep all the records and documents that were involved in completing it. This is often interpreted to mean that this paperwork should be retained in hard copy, but that’s not the case. "Most records can be scanned and kept electronically on a computer or a storage device such as a CD or memory stick," HMRC guidelines say – as long as these documents are easy to reproduce, they’re legally admissible.

If you’re interesting in discussing how document scanning can improve the way you store tax records, or those of your organisation, why not give Dajon Data Management a call today?