George Osborne: Tax returns will have to be filed four times a year

Tax returns will have to be filed four times a year as part of a “digital revolution” at HMRC, George Osborne has indicated

Business and self-employed workers will be expected to file their tax returns online from 2020 using free apps on their smartphones and HMRC’s website.

The Government estimates that the move will raise an additional £600million a year by the end of this Parliament because it will help the taxman keep a better track of people’s income. It has insisted that the new digital service will make it easier to file tax returns.

Osborne said: “HMRC is making savings of 18% in its own budget through efficiencies – in the digital age, we don’t need taxpayers to pay for paper processing, or 170 separate tax offices around the country.

“Instead, we’re reinvesting some of those savings with an extra £800 million in the fight against tax evasion – an investment with a return of almost ten times in additional tax collected.

“We’re going to build one of the most digitally advanced tax administrations in the world. So that every individual and every small business will have their own digital tax account by the end of the decade, in order to manage their tax online.

A spokeswoman for the ICAEW group of Chartered Accountants said: “This is an additional burden for small businesses especially at a time when they are already struggling with changes such as auto-enrollment. It is already a significant burden for people to file it once a year.”

Earlier this year it MPs condemned the “abysmal” customer service at HMRC after it emerged that half of all calls to the taxman go unanswered.

MPs on the Public Accounts Committee said that despite the fact its performance has got worse, HMRC has failed to produce a plan detailing how it plans to improve matters.

There are fears pensioners are particularly impacted because fewer of them are on the internet and they often have complicated tax arrangements.