Making Tax Digital (MTD)
Worried about Making Tax Digital? Look no further than Haslers’ online services.
Making Tax Digital (MTD) is already well underway – and eventually, it will fundamentally change tax as we know it.
By 2020 all tax systems in the UK will be 100 per cent digital, according to HM Revenue & Customs (HMRC) latest consultation.
For businesses with a turnover of more than £10,000 this will mean recording information on a quarterly-basis, which HMRC will then use to decide a company’s annual tax bill.
The timetable for the phased introduction of quarterly reporting is as follows:
- April 2018 – Businesses with profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs), with turnovers in excess of the VAT threshold (£85,000)
- April 2019 – Businesses with profits chargeable to Income Tax and pay Class 4 NICs, with turnovers below the VAT threshold (£85,000)
- April 2019 – Businesses that are registered for and pay VAT
- From April 2020 – Businesses that pay Corporation Tax (CT)
Businesses, self-employed people and landlords with annual turnovers of less than £10,000 are exempt from these requirements, as are charities, but not their trading subsidiaries.
Businesses will only have 12 months to become familiar with the changes before late submission penalties will be applied, so it is important that they seek help sooner rather than later.
This will create an extra administrative burden for businesses and will require them to use HMRC-friendly software and apps in order to comply.
While some businesses will benefit from simplified accounting on a cash, rather than accruals basis, the majority of small businesses will need to keep an accurate digital record of their business activities.
Failure to get this right could lead to substantial fines under the new penalty point system to be introduced alongside these proposals.
Fortunately, our experts at Haslers are already one step ahead of the game, offering online accounting services which are not only HMRC-friendly, but are also quick and easy to set-up and use – and even allow you to take control of your finances on the move.
By signing up today, you can reap the benefits of on-the-go, online accounts – and our expert advisers will be no further than a phone call away, should you need any help.