Changes to the tax system - A summary of ‘Making Tax Digital’
19th October 2016
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HMRC are proposing to transform the tax system by 2020 under their Maxing Tax Digital reforms. The aim is to make the system more effective, efficient and easier for tax payers. At the moment HMRC is consulting with businesses until 7th November 2016 and Margaret Turner from Turner & Co Chartered Accountants wants to hear your views.

What does this mean?

From 2018 most businesses, the self-employed and landlords with a turnover of £10,000 or above will need to use software or apps to keep their business records, and use these to update HMRC quarterly. HMRC proposes to simplify the underlying tax to support these changes.

The key proposals include

  • Tax returns will need to be submitted electronically every quarter with a year end adjustment possible and the final return due 9 months after the end of your accounting period.
  • Businesses with a gross income or turnover under £10,000 will be exempt, as well as anyone genuinely unable to use computers.
  • Records will need to be kept on digital software or apps. Simple spreadhseets will not be acceptable.

Who will be affected?

  • From 5 April 2018 this will affect the self employed, landlords and any business which is not a limited company.
  • Companies will be brought into the scheme at a later date (currently thought to be 5 April 2020).

What does HMRC want to know?

HMRC are keen to get your views on the following questions as part of the consultation:

  • If you currently keep paper records or use a simple spreadsheet what are the challenges to moving to digital and what support will you need?
  • What level of financial support should the government provide towards software and training?
  • How detailed should the information provided each quarter be and should this be different for businesses of different sizes?
  • Should businesses have 9 months after the end of the accounting period to complete end of year returns?
  • Is £10,000 annual gross income/turnover an appropriate threshold for exempting businesses from Making Tax Digital?
  • Should the smallest unincorporated businesses that are not exempt have an extra year to prepare for Making Tax Digital? How should eligibility for this group be defined? 
  • What costs might you expect your business to incur in moving to Making Tax Digital and do you expect that your business will incur additional on-going costs as a result of these changes, for example from purchasing software, collating information and submitting data?

If you have any view on this proposal Margaret turner would love to hear from you. She is collating responses to respond to HMRC





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Tracey S

Member since: 27th June 2014

I have over 20 year’s marketing experience working for companies including Hewlett Packard, Royal Mail, Hitachi and AQA. I live in Fleet and am the owner of thebestof Fleet helping small and medium companies...

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