MAKING TAX DIGITAL
You may have heard about HMRC’s Making Tax Digital (MTD) initiative? The crux of this is that all businesses and individual taxpayers will be able to access their own tax affairs online, via digital tax accounts. This will be the biggest change in taxation since the introduction of Self Assessment back in 1997.
What is Making Tax Digital?
Originally announced in the spring 2015 Budget, Making Tax Digital (“MTD”) will modernise the UK tax system through the use of digital data. This will make HMRC the most efficient tax authority in the world.
What is a digital tax account?
Digital Tax accounts will replace Income Tax Returns. This will affect millions of businesses and individuals. A digital tax account brings together each taxpayer’s details in one place, it will allow businesses and individuals to view their tax affairs in real-time and see how their tax liability is calculated.
What is the timeline for Making Tax Digital?
Based on information published by HMRC, the Government have now confirmed the new timetable for ‘Making Tax Digital’ (MTD):
- Businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, and only for VAT purposes
- This will need to done from 2019 therefore preparation ahead of this time is essential.
- Businesses will be asked to keep digital records, or to update HMRC quarterly, for other taxes from 2020 onwards. The exact details of this will be confirmed in due course.
Businesses therefore have 12-18 months to ensure they are set up to prepare VAT records.
HMRC are encouraging all other businesses to adopt Digital Reporting over the next 18-24 months, as and when they feel it is suitable for their business.
Will JH Greenwood & Company be able to assist you with your reporting requirements?
Yes, “Agent Access” will enable you to authorise us to access your digital tax account, allowing us to prepare and submit quarterly and annual reporting on your behalf.
How can we help you prepare for MTD?
The big change is that all businesses and certain individuals will be required to make quarterly submissions to HMRC. In order to achieve this your business records will need to be in a digital format. There are a number of options available to you and we are here to help you decide on the most appropriate solution for your business and you as an individual.
If you currently do no use any form of computer software to prepare your reporting, or you are unsure if your current software is sufficient, please contact us to discuss your options in more detail.
For any further information or assistance, please do not hesitate to contact us:
Phone: 01289 302463