In line with the e-invoicing initiative we reported on elsewhere, the Chancellor also outlined broader reforms to modernise HMRC through a Digital Transformation Roadmap, which is expected in Spring 2025.
This roadmap will aim to create a “digital-first” tax system, although it will include measures to ensure support for those unable to go fully digital.
In addition, James Murray, who is Exchequer Secretary to the Treasury and is responsible for the UK’s tax system, has been appointed as the Chair of the HMRC Board. This in part is to help him oversee how HMRC can ‘close the tax gap’ – in other words, collect tax that the government currently believes is being underpaid.
HMRC has a target of recruiting an additional 5,000 compliance staff to help it in these aims.
How businesses might be impacted:
With HMRC focusing on closing the tax gap, businesses should ensure that their tax affairs are in order. You might consider seeking advice to review your tax compliance processes and make sure you avoid potential penalties.
For most businesses, operating digitally is now a day-to-day norm. However, with HMRC moving to a “digital-first” approach, if you’ve been relying on paper-based or old computer systems, it may be time to think about upgrading to online solutions.
If you’re unsure how these changes might affect your business or need support with your tax compliance or digital strategy, please get in touch. We’re here to help you navigate the upcoming reforms and ensure your business is well-positioned for growth.
See: https://www.gov.uk/government/news/chancellor-unveils-package-to-deliver-on-promises-of-new-government
For many sole traders and small business owners, reviewing their accounting system only happens when something forces the issue. For instance, many sole traders are currently looking at whether their accounting system meets the requirements for Making Tax Digital for Income Tax.
UK inflation eased to 3.6% in the year to October, down from 3.8% in September, according to the latest figures from the Office for National Statistics (ONS).