In his combined Autumn Statement and Spending Review, Osborne committed an additional £1.3bn ($2bn, €1.8bn) in funding to transform HMRC into one of the most digitally advanced tax administrations in the world, with access to digital tax accounts for all small businesses and individuals by 2016-17.
Cost savings
The digitalisation of the tax system is expected to deliver an additional £1bn in tax revenue by 2020-21 by reducing errors through record-keeping.
All individuals and businesses will be able to view their tax affairs in real time, providing them with greater certainty about the tax they owe.
The number of calls received by HMRC is also expected to fall from 38 million in 2015-16 to 15 million in 2019-20, leading to additional savings as customers increasingly find the information and services they need online.
Significant savings are also expected when HMRC consolidates its estate from 170 offices to 13 large regional centres.
Capital Gains Tax
HMRC’s digital systems will also be used to dramatically limit the period of time allowed for individuals to pay capital gains tax (CGT) from April 2019.At present CGT due on residential property is currently paid between 10 and 22 months after a disposal is made.
Using the new digital system, the period of time for CGT to be paid will shrink to within 30 days of completion of the disposal.
A draft legislation for consultation will be published in 2016.
