HMRC – Making Tax Digital

 

Below is a brief summary about the ‘Making Tax Digital’ consultations and proposals from HMRC.

 

  • HMRC’s vision is for businesses to be able to easier understand and manage their tax affairs. It wants to make greater use of the information that it already holds such as bank and building society interest to make things easier on the tax payer without them having to compile this information again.
  • Digital record-keeping will be required from 2018 for most businesses, sole traders and landlords in order to report quarterly to HMRC.
  • HMRC aren’t looking to become software providers, they will expect the tax payer to use third party software although they are trying to ensure free options are available.

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  • Those with income below £10,000 will not be required to use the new ‘making tax digital’ system.
  • Further thresholds haven’t been decided yet.
  • This is being looked at while HMRC are reviewing how they can simplify the tax system. Other areas they are looking at are the thresholds for cash vs revenue accounting and similar areas.
  • One thing we can say for certain is that tax administration in the UK will look very different in 5 years time.
  • At Courtley West we keep up to date on all the current developments at HMRC and we proactively engage with many of our clients using the cloud based book-keeping systems which ultimately will be very instrumental in the delivery of the quarterly reports.
  • As always, if you have any queries about how this may affect you or you’d just like to know how we may help your business, please get in touch.