With the tax season in the United States coming to a close today, it’s interesting to compare the differences between the US and the UK when it comes to choices for online tax filing.
Tax filing in the United States is a bit more timely and there are a multitude of thriving online tax services on offer including Turbotax, H&R Block or TaxAct, in addition to free filing software provided by the IRS.
For UK taxpayers however, it’s quite a different story: if you want to do it yourself choices are very limited. While in the US over 30% of taxpayers trust third party software, in the UK this is the preferred method of filing for less that 1% of taxpayers. What these statistics tell us is that established software providers haven’t quite stepped up to the plate in helping us file our own tax returns, saving us from paying hundreds of pounds to basic accountancy services.
To be fair, even though there is lots of room for improvement, the team at HMRC has been doing a good enough job, specifically in ensuring the online service stays an open platform upon which third parties can innovate.
Alas innovation, the main reason why the US market thrives, is mostly non-existent, leading to an estimated tax savings waste in the order of £4.7 billion, as reported by Unbiased (http://www.unbiased.co.uk/tax-action).
With so much innovation happening in online financial services with the likes of Nutmeg (investment management), Transferwise (international transfers), Zopa or Seedrs, does it still make sense to simply answer “hire an accountant instead” when we ask for smart and easy to use do-it-yourself software such as SimpleTax that ensures the most accurate tax returns and savings?