Once upon a time there was a magical land where you could file your tax information to HMRC any time of the day or night and at any given point throughout the year. Information that HMRC had already received did not need to be reported multiple times because their different systems did not communicate with each other. A land where all the information was up to date, without delays and penalties were only issued under genuine circumstances.
To anybody who currently has the pleasure of communicating with HMRC, you will too see the value in this magical land given it is currently a very frustrating and painful process!
Under HMRC’s new initiative making tax digital this fairy tale could soon be a reality. Making Tax Digital is a government Initiative that sets out to transform the current tax system by 2020. It is still in the consultation process but is expected to start in April 2018.
The details on how it will work and the implications for the self employed, small businesses and landlords have been few and far between. but basically it seems to work as follows:
HMRC are proposing it will only apply to small businesses, the self employed and landlords with an annual turnover/income of 10k or more
Making Tax Digital requires businesses to send summary data to HMRC every quarter.
The summary will need to be sent from your online accounting software that will link to and update your online business tax account.
At the end of the year you will have 9 months to file an ‘end of year’ declaration which will submit the final figures to HMRC.
Sound too good to be true? We look forward to welcoming the new initiative and hope that it brings some clarification of the system that has baffled people for years. Many of the clients that we have represented come to us purely because they are so confused by the system and attempts to try and contact a human have failed so these reforms are set to transform the experience of millions of taxpayers. The new system can not come soon enough.
Call 0330 400 5490 and speak to an adviser today.
Blog post written by Ceri Wilson
An experienced Director who controls and oversee all business operations, people and ventures. Responsible for the overall success of the business.
As a leader, he is able to steer a company to the most profitable direction while also implementing its vision, mission and long term goals. Additionally, he has strong crisis management skills to “save” companies in times of need.