HM Revenue & Customs have released
six consultancy documents in August 2016 on the subject of Making Tax Digital
From April 2018 the tax system will
become increasingly digital with initially the self-employed, partnerships and
landlords effected. These businesses
will need to have software or apps to keep their business records, unless of
course you utilise a firm of accountants to keep all these records for you.
Under MTD the tax payer will be
required to upload summary data to their digital tax account with HM Revenue
& Customs on a quarterly basis. The
upload needs to be completed by the end of the month following the quarter,
e.g. quarter to 30 June 2018 by 31 July 2018.
Therefore, there is no point in leaving
this until April 2018, but work should be commenced perhaps from April 2017 in
putting your business records onto appropriate software.
There will be some exemptions, tax
payers with a turnover under £10K would be exempt initially as indeed will be Charities.
There is also talk of a further level
of exemption for a year possibly turnover to £20,000 per annum.
As from April 2019 VAT will come under
the same umbrella with VAT figures extracted from the same digital filing and
no need to file VAT Returns directly.
The use of appropriate accounting
software will facilitate all this and obviously more than ever there is a case
to move to an appropriate software package preferably a Cloud version, allowing
your accountants access and able to deal with your accounting and tax
Whatever happens the matter cannot be
left to an end of year brown parcel package or even Excel spreadsheet or Guildhall
cash book. I am afraid we all have to
move forward into this digital age.
The digital tax account will show an
update of the tax payers overall tax position.
The information from employment (PAYE) banker interest will be directly
fed into the account by HM Revenue & Customs via payroll records and Bank records.
This new system will also apply to Limited Companies and expected to be from April