HMRC: Playing Catch-up
Have HMRC finally caught up with the digital age?
With so many of us now working in the Digital Age using a host of technology and apps to make life simpler and quicker, HMRC are now planning to catchup with the rest of us – but are you ready to the change this will bring?
Making Tax Digital (MTD)
HMRC’s initiative, Making Tax Digital (MTD), can already be seen in a number of different places, such as the online filing of your VAT return and the RTI filings that accompany your payroll routines. Now they’re focusing on taxes, both for the self employed as well as for companies. This was initially introduced in the Finance Bill 2017 but was withdrawn last minute due to a number of complaints about its implementation.
MTD filing requires the electronic submission of your accounts on a quarterly basis, much like VAT returns, and an annual summary once a year. This creates five times more filing than just the current once a year returns we do presently. Since it is required to be done electronically, it means that everyone will now need to keep electronic records in some form. It is unclear at this stage what support will be given to businesses for this but we have read of a number of toolkits that will be made available.
Mandatory MTD filing was due to begin in April 2018 the self-employed and landlords with a turnover above the VAT threshold (currently £85,000). VAT-registered businesses were to join from April 2019, and finally limited companies from April 2020. Although MTD was withdrawn, it is almost certain that it will be introduced in the near future.
Finance Box are already ready for the introduction of MTD and we will support our clients through this transition when it comes around. As a precaution, we are treating these dates as if they were fixed so that we’re ahead of the game when they eventually launch.
If you presently keep any records outside of a computerised system, or if you know anyone that is, perhaps now is the perfect time to talk to us about getting ahead and implementing a new system that will save you hours of work in the future. This applies to even the smallest of traders, like hair-dressers, plumbers and other sole traders.