BUSINESS groups have given a cautious welcome to the decision to scrap annual paper tax returns in favour of personalised digital accounts.
Chancellor George Osborne plans to switch to the new online accounts by 2020, allowing individuals and businesses to submit records throughout the year via computer, tablet or smartphone.
The Federation of Small Businesses (FSB) Scotland said the move was a welcome step forward.
Andy Willox, Scottish policy convenor for FSB, said: "We've long called for a simpler tax regime for small businesses and the self-employed. These announcements are a welcome step towards developing a practical, modern tax-regime fit for how we do business in the 21st century."
The National Farmers Union Scotland (NFUS) described the announcement as "innovative" and said it would help to reduce the amount of paperwork many farmers have to complete.
However, the union raised concerns over access to sufficient broadband in some areas of Scotland.
The Institute of Chartered Accountants Scotland (ICAS) backed these concerns, adding: "Enormous resources have been put into digitising HMRC processes in recent years and it is sensible to set out a longer-term vision of where this will lead - for the public and for HMRC.
"Whilst we welcome the effective use of digital services, there is a risk that this could lead to the exclusion of those who are unable to use this delivery mechanism - the elderly, vulnerable and poor may not always a have adequate resources or inclination to file online.
"ICAS does not support mandatory 'online everything' in the tax system. There is also further work required around ensuring digital security and proper access to broadband facilities for all."
The move, which the Chancellor described as "a revolutionary simplification of tax collection", is expected to start next year with five million small businesses and the first 10 million individuals switching to digital.
By 2020, some 55 million people across the UK will have a digital tax account.
Jonathan Isaby, Chief Executive of the TaxPayers' Alliance, said: "Scrapping traditional self assessment could also help make tax easier to administrate for millions, but taxpayers will be concerned about the possibility of yet another government IT disaster."
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