You may have seen from the press that HMRC are in the midst of ‘making tax digital,’ a project designed to make them one of the most digitally advanced tax authorities in the world.
This is a massive project and not all of the detail is available at present, but what is clear is that it will result in a number of significant changes for businesses and how they keep their records.
It is important to recognise that this is not just about tax. Businesses will be required to keep digital accounting records and to send quarterly updates with summary information to HMRC during the accounting year.
The figures will be finalised in an end of year declaration, when any accounting adjustments etc. are likely to be made. Agents will be able to send the reports on behalf of their clients.
The changes will apply from April 2018 for those businesses that are subject to income tax and April 2020 for those who pay corporation tax. VAT accounting will also by aligned with this system, this is expected to be during 2019.
Only unincorporated businesses and landlords with turnover of less than £10,000pa have to date been excluded. Thought there is suggestion that charities and persons who are genuinely unable to engage digitally will also be given exemption.
The detail on these changes is still unfolding and we will keep you informed as things develop further. In the meantime, for more information, please contact Lesley Sutton on 01484 550037 or email firstname.lastname@example.org.