Making Tax Digital - what you need to know!
By 2020, the tax return will have been abolished altogether. Most businesses, self-employed people and landlords will need to keep records digitally and will update HMRC more frequently than is currently the case.
On the 15th August 2016, the government released 6 consultation documents regarding their Tax Digitalisation strategy. Here we summarise the key proposals, outline how MHA MacIntyre Hudson can assist with implementing digital systems and highlight the key advantages that digitalisation will present.
What is HMRC proposing?
Businesses and landlords will be required to maintain their records on apps or software that is compatible with HMRC’s interfaces. HMRC is exploring the possibility of businesses keeping their records on Excel but while it is open for discussion, this route seems unlikely.
Quarterly reporting and the year end declaration
Businesses and landlords will have to submit information online on a quarterly basis as well as make an end of year declaration through their digital software. The information will be summary information rather than on a transaction basis.
Businesses and landlords with gross income < £10,000 p.a., charities, community amateur sports clubs and the digitally excluded will be exempt from tax digitalisation.
Voluntary pay as you go
Businesses will be able to opt into a pay as you go system for the collective payment of taxes.
HMRC is considering a simplification to the process of computing and taxing profits. An extension of the cash basis is being proposed, along with the basis on which those profits are assessed in a particular tax year.
To find out how this will affect you, click here or on the image below to read our factsheet.
If you have any immediate Making Tax Digital questions please contact your local office or send an enquiry as we are interested in discussing this with you.