Online Filing - Background Briefing
The Carter Review
In July 2005, the Government asked Lord Carter to advise on measures to increase the use of HMRC's key online services, in order to ensure sustainable and efficient service delivery for taxpayers, while continuing to support compliance.
22nd March 2006 saw the publication of Lord Carter of Coles' Review of HMRC Online Services, which concludes that well-designed online services can bring benefits to taxpayers and the Government. His report sets an aspirational goal for HMRC: to aim for universal electronic delivery of tax returns from businesses by 2012.
The full list of Lord Carter's wide-ranging recommendations, that HMRC will now be taking forward, are in his report. The key recommendations are that, subject to the right services being in place:
- By 2008
- VAT - Returns to be submitted online and payments made electronically by large employers and newly registered VAT traders.
- PAYE - "In Year" forms (P45/P46) to be filed online by large and medium employers from April 2008.
- By 2010
- VAT - Returns to be submitted online and payments made electronically by all businesses with annual turnover in excess of £100,000.
- PAYE - "In Year" and "Year End" forms to be filed online by all employers from April 2010.
- Corporation Tax - Returns for all companies to be filed online using XBRL and electronic payments made from April 2010.
- By 2012
- VAT - Returns to be submitted online and payments made electronically by all businesses from April 2012.
Mandation
Mandation of online filing means that by 2012 most businesses will have to file the majority of returns online.
HMRC offers facilities for filing returns online through their website, but this involves transposing figures into the online forms by hand. Many software vendors are starting to offer online filing facilities direct from the software. Payroll software suppliers have been leading the way with many, including Liberty Accounts, supporting online filing since 2004/05. More recently Liberty Accounts added online filing of VAT returns and was the first, and currently only, supplier in the UK to have an HMRC recognised online VAT filing facility.
Online filing functionality will increasingly be a key feature of accounting and payroll software. Many suppliers are cynically drip-feeding online filing features into their products to force users to pay for upgrades. At Liberty Accounts we are committed to providing our customers with a product that helps them comply with online filing requirements. All users of Liberty Accounts will have access to online filing features as they are developed.