Digital Tax Accounts
Since 2015, HMRC have been introducing proposals for changes to the way in which information from businesses and property income is submitted to HMRC by way of a Digital Tax Account.
The introduction of the Digital Tax Accounts for taxpayers means that you can see the information that HMRC holds from employers, banks, building societies and other government departments and you are able to check them to ensure that the details are correct and complete.
You can set up and log-in to your Personal Tax Account at the following link:
Making Tax Digital
Changes are being introduced designed to make it easier and more efficient for individuals and business to get their tax right and under the new regulations, businesses, self-employed people and landlords will be required to :
- Maintain digital records through software or apps
- Report summary information quarterly through your Digital Tax Account
- Make an ‘End of Year’ declaration (very similar to the current Self-Assessment Tax Return)Businesses, self-employed people and landlords all with turnovers under £10,000 are exempt from these requirements. Therefore, for those who are in employment and for pensioners there will not be a need to use the digital service unless they have a secondary income of more than £10,000 per year from either self-employment or property.
The updated timetable, announced in the Spring Budget, for the introduction of Making Tax Digital is as follows:
- April 2018 for unincorporated businesses (including landlords) in excess of the VAT threshold (currently £85,000)
- April 2019 for unincorporated businesses (including landlords) where turnover is below the VAT threshold (subject to the £10,000 turnover exemption)
- April 2020 for companies liable to UK corporation tax
If your business is already VAT registered, then you will already engage with HMRC on a quarterly basis online and so are better placed to make the transition to keeping digital records and updating HMRC quarterly.
We understand that these changes may seem a little daunting, but remember that we are here to help and guide you through this process. More details can be found at the following link: https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital
Despite the continued opposition to these proposals by businesses and their advisors, it is clear that smaller businesses should not ignore the impending changes and ensure that we are all ready to meet the requirements when introduced over the next few years. We will continue to offer support and expertise for all your tax requirements.