Once MTD is in place, HMRC claims that the annual tax return will go, but businesses will still need to prepare year end accounts in order to reconcile their quarterly payments and make accounting adjustments.
However, instead of a self-assessment return / corporation tax return businesses will be required to file a year end declaration. Is there any difference?
The key difference between the year-end declaration and a tax return, other than in name, appears to be that HMRC will pre-populate some of the return figures, e.g. bank interest, income from employment, pensions, etc. But it It will clearly remain the taxpayers responsibility to check all entries included by HMRC.
For the self-employed, it is assumed that HMRC might attempt to pre-populate the year-end declaration with data submitted in the quarterly return figures. But this is unlikely just yet, and so as is already the case with VAT, a business will still need to reconcile their quarterly returns to their year-end accounts and so all must reconcile to the end of year declaration.
Overall, this doesn’t feel like the death of the tax return to us!
For more information, please contact Lesley Sutton on 01484 550037 or email email@example.com.