The Office of Tax Simplification (OTS) has explored how tax reporting could be made easier for taxpayers if third parties were required to provide information to HMRC.
The annual stress for taxpayers who file a self-assessment tax return often stems from searching for the paperwork to support the entries on the return, including:
• interest certificates from banks;
• dividend statements from brokers;
• rental income from letting agents;
• pension contributions paid;
• gift aid statements from charities and from online donations; and
• employer information, such as P60, P45, P11D.
In its latest findings, the OTS has suggested that this type of data should be reported to HMRC by third parties and used to pre-populate the taxpayer’s single tax account. The OTS has said that, while some of this is already provided, the majority of it is not and what is there is often inaccurate.
The OTS report concludes with recommendations for the government to set out a clear roadmap for how these changes would be consulted on and then implemented with the necessary resource required.
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