Online tax return rules could encourage firms to choose document scanning

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Document scanning and storage options could be chosen by firms that want to keep their tax information in one place.

Companies that file their VAT online should consider looking into document scanning and storage services so they can move their physical paperwork offsite and free up more space in the office.

John Whiting, tax policy director at the Chartered Institute of Taxation, said that under new HM Revenue & Customs regulations, more companies will be forced into completing tax files online even when they are not comfortable doing so.

From April 1st this year, all VAT-registered companies will be required to submit their tax returns online and pay electronically, so any business that is not registered for HMRC’s online service needs to take action now.

Mr Whiting commented: "Let’s be realistic, most stuff is going online. That is efficient – if someone is comfortable with it … it saves the Revenue time and money. They don’t have to upload stuff, everything is automatically into their systems, and it can be quickly integrated.

"There are benefits for the trader. They get acknowledgements; they get promptly acknowledged that the return has gone in, so it’s not a complete one-way thing," he pointed out.

However, some small businesses will not be comfortable with this move towards digitalising all form-filling and payment options, particularly the ones "that manage to do a little business but aren’t totally geared up to do things electronically".

"OK, says the Revenue, you can phone us and give us the figures over the phone, but it doesn’t necessarily fit with everybody. For the very smallest businesses it is not automatically going to be a benefit for everybody," Mr Whiting added.

Under the existing rules, only newly registered firms and those with a turnover exceeding £100,000 a year were required to go down the online tax return route, but now all businesses will be considering their data protection procedures as they gear up to start submitting their returns through HMRC’s website.
 

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