Tranformation Of The Tax System
If you are a self-employed person, a landlord, or a VAT registered business, then the way you speak to the government is about to change.
Making Tax Digital is a transformation of the Tax system which will provide every Taxpayer with their own Digital Tax Account, and will draw from other sources, such as Employers, Banks & other Government departments, information which HMRC already holds. This will enable Taxpayers to check at any time that their details are complete & correct.
At the moment, most taxpayers cannot see a single picture of their liabilities & entitlements in one place. HMRC is changing that. By 2020, taxpayers will be able to see their complete financial picture in their digital account, and will be able to set an over-payment of one tax against the under-payment of another.
The Government believes that businesses should not have to wait until the end of the tax year or even longer before knowing how much tax they should pay. HMRC will collect and process information affecting tax in as close to real time as possible. From April 2018, businesses, including everyone who is self-employed and those letting out property, will update HMRC at least quarterly where it is their main source of income (or a secondary source of income above £10,000 and their main income is from employment or a pension). These changes will be phased in by 2020, giving businesses time to adapt. It is expected that most businesses will therefore be required to use digital tools such as software or apps, keeping a record of their income and expenditure. Once the software has compiled the relevant data, businesses or their agents will feed it directly into HMRC systems via their computers or smartphones.
Accountants & Bookkeepers like myself are here to help you. The Government believes that every practitioner like myself will be required to take on 682 new clients, in order to meet the demand of those who will need help with these changes. If you think you may be one of those potential clients, don’t leave it to the last minute – all our possible spaces may have been taken.