The UK Government’s shift to digital tax returns is yet another example of how ridiculous, expensive and time-consuming for the end user the drive to digitalisation is by governments. The Times has recently summarised the changes clearly and succinctly in an excellent article by Alice Wright entitled “Why your tax-return headache is about to become a nightmare”. As of April this year the Making Tax Digital scheme means that:
- “landlords and the self-employed with a gross income above £50,000 a year will have to pay for commercial software so that they can file their tax returns” (“HMRC said it will cost an average of £320 to switch to government-approved software, then £110 a year after that, but experts said it could be four times that much”);
- this has to be done every three months, not anually as at present. People “will also have to file quarterly, rather than annual, updates to HMRC on their income and expenses. Anyone missing the deadlines will be fined under a new points-based system, although the penalties will be waived for the first year”
- the financial cost of this is very significant: “HMRC has estimated that the introduction of Making Tax Digital will cost about £4.3 billion — with £1.4 billion being government spending and £2.9 billion the cost to taxpayers and small businesses of buying software and employing accountants”.
How have we let this happen? It seems totally stupid with the only ones really to benefit being the companies selling the software – which is guaranteed to have glitches and take taxpayers far longer to complete (four times a year) than the previous paper based systems.
Just because it is possible to use digital tech to do something does not mean it is wise to do so!
(See also https://www.thetimes.com/article/5b5f252e-69a8-422e-9f99-c116d16308a4 )
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