Making Tax Digital
HMRC has finally issued its consultation documents about the digitalisation of the UK tax system so we can start to get a feel for what is in store for us all.
The headline is that the annual tax return will disappear but HMRC stress that, contrary to rumour, there will not be a requirement to submit quarterly tax returns. HMRC will gather all the information that they already hold about us (wages, salaries, savings income etc.), display it in our “Tax Accounts” and give us a chance to confirm or challenge the information. For a large number of people who currently have to submit a tax return that will be it.
People who have to maintain records, mainly small businesses and landlords, will have to keep records digitally in such a way that information can be submitted to HMRC “at the click of a button”.
People who use the services of accountants may not see a great deal of change because most accountants take their clients’ records, however maintained, and use software to produce accounts which are the basis of tax submissions currently.
HMRC are promising to provide free software which may provide a solution for those people who make their own tax submissions but who currently keep manual or spreadsheet records.
The current plan is that the various changes needed will be phased in between now and 2020, it is expected that the need to maintain digital records will happen in 2018.
AIMS Accountants for Business, if you like the way we think you will like the way we work, see www.aims.co.uk for more information.