The roll-out of digital tax accounts will help companies to manage their taxes, access information and resolve queries more quickly.

Overseas companies seeking to open and operate subsidiaries in the UK will find this easier to do than ever before.

It can be difficult to start a new business in many countries – even in Europe. Personal visits to government offices may be required, wasting hours to submit or obtain company papers. Original hard-copy documents require certification and apostille – an often-nonsensical process as the information required is freely available to download from government websites. I’ve lost count of the times an exasperated client has shared with me their aggravations of dealing with overseas business affairs.

Open for business

Yet the UK government is keen to increase foreign investment and it is easier to do business here than any other major European economy.

The UK welcomes investors with its skilled labour market, a lower level of bureaucracy and a language that has become the world’s standard for commerce.

Tax policy provides a big competitive advantage for Britain. Corporation tax in the UK is charged at just 20%, which is one of the lowest rates in Europe.

Digital transformation

The UK’s tax authority, HMRC, is becoming a digital organisation. Tax returns are already made online and all taxpayers – personal and corporate – are being given their own digital tax accounts.

The rolling-out of digital tax accounts is being done in phases for completion by 2020. By then the tax authority will have moved to a fully digital tax system.

Using these digital accounts, all payments and correspondence with the tax authority will be conducted online. This will make it easier to deal with the tax system and taxpayers will get more up-to-date and reliable information from the tax authority, along with faster responses to queries.

Digital tax accounts will bring together into simple statements all the various taxes due – which for a company include corporation tax, national insurance and VAT, as well as income tax collected from employees.

Much of the tax system is already online: almost all corporation tax and VAT returns are submitted online. And more than two million small businesses use digital tax accounts.

Financial management

Not only do digital tax accounts improve relationships between a company and the tax authority, they can also be the basis for companies to improve their internal financial management.

HMRC takes the view that businesses should have a computerised accounting system. For our clients this is not an issue. We have cloud-based systems that can connect us with your company, to increase the flow of fully up-to-date financial information. These systems can also be integrated with those of the tax authority, reducing the cost and time it takes to make a tax return.

The UK’s tax system is going digital. The UK is a world centre for technology innovation and the UK government recognises the need to keep pace. It promises the digital transformation of tax administration, leaving more time to plan and utilise the abundance of tax reliefs available in the UK.

To read in more detail the transformation plans of the tax authority, HMRC, click on this link.


The information in this article was correct at the date it was first published.

However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.

If you would like to discuss how this applies to you, we would be delighted to talk to you. Please make contact with the author on the details shown below.

Comment on this...

Philip Woodgate - Partner


T +44 (0)20 7874 8836

Philip advises businesses and their owners, including international businesses coming to UK, helping them set-up and establish in the UK.

He acts as a centre-point to solve business issues - coordinating our specialists and adding selected external partners into the mix where appropriate.

A key part of his role is to provide a fast response and practical advice for technical tax and financial issues.

As a member of the ICAEW IT Faculty Technical Committee, he combines financial and technology skill sets and provides management reporting and accountancy services using cloud technology.

One comment

  1. Philip Woodgate Post author

    After this blog was posted it was announced that the corporation tax rate, which is currently 20%, will fall to 17% from 1 April 2020.

    This is excellent news for overseas companies seeking to open and operate subsidiaries in the UK.

Share your thoughts

Your email address will not be published. Required fields are marked *

All fields are required