HMRC claim that five million people are now using digital personal tax accounts (PTAs) as part of the campaign to move all tax submissions online. Making Tax Digital is supposed to end the tax return as we know it, with solely digital quarterly returns scheduled to be in effect by 2018.
Personal tax accounts, launched in 2015, represent the first stages in the implementation of an all-digital system. The system allows taxpayers to receive an income tax estimate, tax code estimate, file a tax return, manage tax credits and check their state pensions, marriage allowances, work benefits, car details and medical insurance.
Some financial spokespeople have claimed that Making Tax Digital requires the kind of resources that HMRC doesn’t have. Evidence for this being that digital implementation for small to medium-sized companies has been moved back to 2019. There is also no reason why further delays could not occur.
There are wider fears that HMRCs attempts to cut costs along with ambitious but much-needed reforms could mean problems and confusion for taxpayers. The National Audit Office has voiced concerns about the feasibility of the quality of service for reforms amid cuts in budgets. HMRC reduced the cost of its personal tax operations between 2010-11 and 2014-15 by £257 million, 32%. Fears are rising that an under-resourced HMRC may be unable to venture into uncharted territory whilst also putting out the fires that arise along the way.