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Making Tax Digital - The Changes

Discussion in 'Money, Accounts & Finance' started by Cody, Mar 27, 2017.

  1. Cody

    Cody

    Joined:
    Feb 17, 2016
    Messages:
    1,223
    As we all should know by now, the government are transforming the tax system and should be fully rolled out by 2020, with a test pilot being scheduled in April 2017 for around 300 individuals.

    Making Tax Digital is to ensure the administration side becomes much more effective and efficient for tax payers, by the use of a fully integrated digital tax-system. However for a select fe that cannot engage digitally, they will be exempt.

    By making the tax-system digital:
    - You will have access to your complete business tax affairs.
    - HMRC will process information regarding your tax at real time. Hopefully making tax due or
    repayments a much faster process.
    - No longer have to wait until the end of the tax year to find out how much tax you need to pay.

    Who does it apply to?:
    This will apply to the self-employed, individual tax payers, and small businesses too. The initiative is already being rolled out with more changes to come. The Making Tax Digital will take affect on a minimum threshold of £10,000 in annual sales, which means those with a turnover of less than £10,000 will not need to go digital.

    Charities will also not have to keep their records digital.

    businesses will be given until 2019 to fully comply with the changes.

    How will it work?
    More information regarding how to use the digital tax-systems will be released some time this year. However what we know far is, you'll be able to use a spreadsheet (though as long as it meets MTD's requirements).

    It's also likely that the spreadsheets will need to be used/ combined with software, which can then be submitted directly to HMRC via your smartphone or computer.

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