How will Making Tax Digital impact my business?

From April 2019 for VAT, but not before 2020 (and possibly later) for personal tax and corporation tax , businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and send quarterly updates to HM Revenue & Customs (HMRC).

The UK tax system is undergoing a digital revolution, with far-reaching consequences for businesses, landlords and taxpayers.

The government wants it to be fully digital, with businesses and landlords having to file their accounts online once a quarter. The exact timetable for this to happen for all taxes remains unclear, and the reforms will not attempt to simplify the tax system; only the way it is administered.

Individual taxpayers with straightforward tax affairs will no longer have to file an annual tax return, but will instead have to confirm their income details in an online Personal Tax Account pre-populated by the tax office from information it has gathered from third parties, such as banks, employers and other government departments.

Making Tax Digital will be available on a voluntary basis for businesses and landlords with a turnover below the VAT threshold.

Bishop Fleming can advise you on the best and most cost-effective way to meet the challenge ahead to make your life easier. For landlords and small businesses we will have a mobile app that enables digital recording and automated population of the quarterly updates.

Free software with limited functionality will be available for taxpayers with straightforward tax affairs, though commercial accounting software with more functionality will be preferable for many. Businesses will also be able to use spreadsheets if they wish, but will have to ensure they meet the necessary requirements.

Please contact a member of our business tax team to find out how we can help you and your business or visit our Making Tax Digital area.

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