Digital by default – penalising rural taxpayers

09 May 2016

Sarah Suanders

Recently, there has been increasing pressure to introduce electronic tax returns and tax accounts, and phase out non-digital access. But despite this being a forward-looking and admirable plan, recent reports regarding rural broadband access suggest that many businesses and individuals will be effectively excluded from these services

The Government’s universal service obligation regarding the provision of rural broadband means that those lacking broadband could wait up to four years before they are even legally entitled to request a service. There would be no general roll-out of broadband services in rural areas, but broadband could be laid on by request. It is not made clear how this is to be financed. It has been suggested that, as with rural telephone lines, costs over a certain amount would have to be funded by the subscriber personally.

The Government states that 95 per cent of the UK will be covered by the current plans, but this leaves 5 per cent uncovered. In 2015/16 there were 29,700,000 individual UK tax payers, suggesting about 1,485,000 without broadband access, of which, on average 232,500 may be higher rate taxpayers and 16,600 additional rate taxpayers. Both groups are likely to need electronic access to their tax affairs.

It would be one thing to lack broadband for normal purposes - merely an inconvenience, but a major one for somebody trying to run a modern business. But to be denied access to your tax affairs, or even potentially penalised for failure to e-file would be grossly unfair.

We take the view the every step towards ‘digital by default’ must bear in mind the digitally excluded, from those in rural areas who cannot physically access the service, to other groups such as the elderly who may face non-physical, but equally valid, barriers to digital participation.

If you would like any more information on this issue please get in touch with Sarah Saunders or your usual RSM contact.