Making Tax Digital is an HMRC initiative that aims to revolutionise the UK tax system and ultimately bring an end to self-assessment.
The main aim is to make tax administration more effective, efficient and easier for taxpayers through the implementation of a fully digitised tax system by 2020, whilst also reducing HMRC’s overheads for managing tax affairs. This HMRC Youtube Video gives you an overview of how the scheme works.
The amendments to Making Tax Digital will mean:
v Only VAT registered businesses will need to keep digital records and only for VAT purposes.
v Businesses will not be asked to keep digital records or update HMRC quarterly for other taxes until at least 2020.
v Businesses will need to keep digital records using compliant software.
1. Better use of information – Digital Tax Accounts will mean that businesses can see the information that the HMRC holds and will be able to check at any time that this information is up to date and accurate.
2. Tax in real time – HMRC will collect and process information affecting tax as close to real time as possible so businesses should know in advance how much they need to pay.
3. A single financial account – by 2020, customers will be able to see a comprehensive financial picture in their digital account, just like online banking.
4. Interacting digitally – compliant software will be linked directly to HMRC systems, allowing businesses to send and receive information directly from their software.
Most probably – Yes. Making Tax Digital is compulsory for any business with a turnover above the VAT threshold (currently £85,000).
All businesses above this threshold will have to submit their VAT return through the new HMRC interface.
Making Tax Digital will also be available on a voluntary basis to any businesses that wish to use it.
It will be necessary to follow these changes in the rules from your next VAT submission after April 2019.
Firstly, more information can be found on Making Tax Digital here.
Sage are working on ensuring that their software is compatible and ready for when these changes come into force in April 2019.
The Onesys Group will be contacting you to discuss these changes and how the software and Onesys can help you be compliant. Please feel free to call us directly in the meantime on 01423 330335 or firstname.lastname@example.org if you have any questions or need any advice.
There will also be a slot on this at our Customer Day on Friday 27th April at Sage Head Office in Newcastle. You can register here if you’d like to attend.
Finally, don’t be scared of these changes. We will be in touch soon to go through this with you and help to ensure compliance by the deadline of April 2019.