Making Tax Digital - important changes from HMRC
With the advancement of technology and the obligation to store most of our information, your taxes and accounts will be completely digital by the end of 2020, as HM Revenue and Customs almost completes the process of Making Tax Digital (MTD).
Although there will be many changes, HMRC reassures that it is all for the best.
Your taxes will have to be submitted quarterly, but that will only make up for the errors (and fees) that have been a problem until now.
As with the rush of January’s tax return submissions, businesses, sole traders and landlords will have to consider the new legislations regarding MTD.
The main goals of HMRC are:
· A must for all businesses and landlords to submit all the records digitally
· To make quarterly uploads to HMRC
· HMRC will work with third parties – with banks, employers and pension providers for the information not to be duplicated; all the information will collate
· The option to submit the tax earlier
· You can see your accounts as a summary, more like the Internet Banking service.
· You will not have to wait until the end of the tax year to know how much tax you owe to HMRC.
The process started in 2015 and will be completed by 2020, as it is HMRC’S goal to make the UK “the most digitally advanced tax authority in the world”.
Millions of people already used their digital tax accounts, and if you have not activated your DTA (Digital Tax record with HMRC) you can do via the Government Gateway at www.gov.uk/personal-tax-accounts to familiarise yourself with the information held there.
From 2018, all the unincorporated businesses and landlords with the annual income (not profit) more than £10,000 and the VAT threshold, must keep the records digitally, using either a local or a cloud-based accounting package in order to upload to the DTA each quarter.
Therefore, the first end of year submission under the new rules will be on the 31st of January 2020, for the tax year 2018/2019.
Businesses, self-employed people and landlords will be required to start using the new digital service from, according to gov.co.uk:
At the moment, you are able to make voluntary payments on account, but reports suggest that tax payment dates might change this year.
The rules and regulations are complex and somewhat confusing, as not providing your submission on time can result in a fine. HMRC has confirmed that penalties will not be charged during the first 12 months of MTD and they still consult on the penalties system, across all taxes and situations.
More information you can find on HMRC’s website https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital .
Bookrite Bookkeeping & Accountancy Services Ltd can help and guide you to get started on keeping your accounts digital and Bookkeeping. Agents cannot currently access DTA’s, although HMRC is currently working on it. Once HMRC solved this issue, we can also help you with the quarterly uploads.
Call us on 01749 321007 or email your enquire at accounts@bookrite.co.uk.
