English local government must link business rates billing and collection systems to Her Majesty’s Revenue and Customs digital tax accounts by 2022, the government has announced.
Chancellor George Osborne announced the move in yesterday’s Budget statement to Parliament.
It forms part of wide ranging reforms to business rates, which will see more frequent revaluations – at least once every three years.
The Treasury’s Red Book, which outlines details of the Budget measures, said: “The government will transform business rates billing and collection.
“By 2022, local authority business rate systems will be linked to HMRC digital tax accounts so that businesses can manage their rates bills in one place alongside other taxes.”
The government will now work with councils across England to standardise business rate bills and give business ratepayers the option to receive and pay bills online by April next year.
Once local authority and HMRC systems are linked, the government will consider introducing a new business rates allowance for small businesses.
“This would be applied to a business’s total property portfolio across local authority areas allowing businesses that grow and acquire more property to benefit from relief,” the Treasury said.
The government also announced a number of moves to help it in its aim of moving all tax collection online.
It said that from 2018, businesses, the self employed and landlords who keep digital tax records will be able to adopt “pay-as-you-go” tax payments.
“This will enable them on a voluntary basis to choose payment patterns that suit them and better manage their cashflow,” the government said.
The government will also examine options to simplify tax rules for this group to ensure that the new system works smoothly.
In advance of the changes, the Budget announced £71m to improve the current service HMRC offers to all taxpayers.
This would lead to a seven day a week service by 2017, with extended hours and Sunday opening on online services and tax phonelines “so that people and businesses have more opportunity to contact HMRC outside of working hours”.
Chris Jones president of the Chartered Institute of Taxation, said: “This investment is a definite step in the right direction. It is imperative that it puts a stop to the decline in service standards at HMRC that we have witnessed over the last few years, and which we feared would be affected even further by the reductions in resources at HMRC announced at the time of the Autumn Statement.
“This investment will be essential to help taxpayers get to grips with their new digital reporting requirements as HMRC’s Making Tax Digital programme is rolled out over the next four years.
“If Making Tax Digital is to proceed as planned, and on time, then the government must make sufficient resources available to ensure that high quality education and support is available to every taxpayer who needs it.”