Skip to main content
Home » Tax » Building a digital future for tax to make it easier for everyone
Future of Tax Q1 2023

Building a digital future for tax to make it easier for everyone

iStock / Getty Images Plus / NatalyaBurova

Joanna Rowland

Director General for Transformation, HMRC

Digitalisation of business records and tax administration is already helping UK businesses keep better control of their finances, reducing errors and saving them time.

Most of us are already banking, paying bills and interacting online, so going digital with business records and taxes is the next step.

Transforming online tax services

In HMRC, with the help of partners across the finance and software sectors, we’re transforming the way we deliver services for tax and customs to make it easier and quicker for everyone.

We’re redesigning processes around the needs of individuals and businesses so that they can get their tax affairs sorted online or via the HMRC app, saving time by not having to call or write to us.

Our app allows users to check things like their tax code and National Insurance number or claim a refund if they think they’ve paid too much tax. Download it for free and give it a go on an iOS or Android device.

We’re also building HMRC systems that can directly interact with business software so that keeping digital records and filing tax returns as part of Making Tax Digital (MTD) is as easy and seamless as possible.

If a business uses compatible software to keep track of finances, they can easily file a tax return as needed, as all the information is already available to submit — no more hunting for bits of paper to find the quarterly figures you need.

Keeping digital accounts and
records has many benefits.

Businesses now using compatible software

Filing VAT returns through software is already the standard way for VAT-registered businesses to do their tax returns. Nearly 2 million VAT-registered businesses are keeping their VAT records and filing their returns in this way; and last year, more than 8 million VAT returns were successfully submitted through compatible software.

Benefits of going digital

Keeping digital accounts and records has many benefits. Independent evidence shows that using MTD-compatible software is reducing avoidable errors and making it quicker and easier for businesses to manage their VAT affairs and keep control of their finances online. 

You can find more information about Making Tax Digital for VAT, including a list of compatible software on GOV.UK.

Digitalising income tax

From 2026, some Self Assessment customers will be expected to use software to submit tax returns.

We’ll work closely with self-employed individuals and business owners to ensure there are plenty of opportunities for them to get involved before it’s mandated so that they can feel confident and ready to maximise the benefits of managing their business records and tax affairs digitally.

Next article