Why we’re not sweating about ‘Making Tax Digital’
There’s lots of talk about ‘making tax digital’, and it already has it’s own acronym (MTD). But what exactly does ‘making tax digital’ mean?
HMRC has plans to transform the tax system, under four headings:
- Tax simplified
- Tax in one place
- Making tax digital for businesses
- Making tax digital for individual taxpayers
Is there another agenda?
It’s about making paying tax much easier, quicker and simpler for both you and HMRC (here is the HMRC spin). Our view is that it will also enable HMRC to start collecting more taxes earlier than they do at the moment, improving their cashflow.
How will it affect me?
As an individual
As a small business
There are likely to be some initial exemptions for businesses and self-employed people with a turnover of less than £10,000 and people with a secondary income of less than £10,000.The government are still consulting on those.
However many businesses will need to file quarterly returns from the period starting 6 April 2018, and we don’t yet know exactly how these will be submitted.
We may need to do things differently
According to Xero’s UK MD, Gary Turner, it’s no surprise Microsoft Excel has been the most “the most popular accounting software platform in the UK over the last thirty years” given the failure of the desktop accounting market to meet the needs of the small business sector.
However the accounts market is shaping up, and those small businesses who have embraced new cloud accounting technology will know that day-to-day it’s as simple as taking a photo of a bill or clicking ‘submit’ on the VAT return.
They also know that it makes life much easier when you’re not spending time carting boxes of receipts to your accountant, but instead are looking at up-to-date information about how the business is doing.
Go digital yourself. We expect MTD may be delayed by Brexit, but whenever it happens, you’ll be ready.
It’s surprisingly easy to get your online accounts up-and-running. See for yourself at one of our upcoming workshops, or give us a call on 01935 385929 to talk things through with one of our digital champions.