The government have plans to get tax returns to go digital and have put out 6 consultation papers which give an idea of the direction they are planning to take. In summary the main points are:
- From 2018 most businesses, the self-employed and landlords will need to use software or apps to keep their business records, and to update HMRC quarterly. There may be a deferment for the smallest businesses with turnover above £10,000 and exemptions for those unable to use digital tools.
- There will be an exemption for all unincorporated businesses and landlords with gross income/annual turnover below £10,000.
- HMRC are consulting on simplifying some of the underlying tax rules to support the changes being introduced by Making Tax Digital, including extending the ‘cash basis’ to larger businesses and property businesses.
- HMRC are consulting on introducing ‘voluntary pay as you go’ for businesses and landlords using digital records
- There are proposals to introduce a new regime for late submission penalties, late payment sanctions and proposals to align interest across taxes.
- HMRC are also consulting on how more effective use of third party information can contribute to the transformation of the tax system.
We are keeping a close eye on the proposals and how they will affect our clients. Over the coming months we will be able to tell you more, specifically how the change to Digital Tax will impact on you and your business. We are already using and advising on a range of software solutions that will be compliant with the proposals. Since the software is online you can access it anytime, anywhere with broadband or a Wi-Fi signal.
If you are interested in making a start please talk to us.