HM Revenue and Customs is to introduce a new online tax return system, in a move George Osborne claimed would herald the end of "complex, costly and time consuming" form-filling.
In his annual Budget statement, the chancellor said HMRC would aim to give five million small businesses and 10 million individuals access to a single online tax account tax from 2016.
"We will abolish the annual tax return altogether," Osborne told the House.
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"Millions of individuals will have the information the Revenue needs automatically uploaded into new digital tax accounts. A minority with the most complex tax affairs will be able to manage their account on-line.
"Businesses will feel like they are paying a simple, single business tax – and again, for most, the information needed will be automatically received."
HMRC published more detail on the plans alongside the Budget, promising that individuals would also be able to use their online accounts to see how National Insurance payments affected their state pension.
"With a digital tax account, individuals and small businesses will be in complete control of their tax affairs and have confidence that they have met their obligations," the HMRC document states.
"They won’t need to provide information that HMRC already holds, and they’ll be able to see and understand their tax liability. For those who deal with several taxes, it will be just like dealing with one — taking the cost, time and stress out of the process."