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Making Tax Digital - Starts 2019...I'm ready, are you ?



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Major Changes are coming to Self Assessment and Tax Returns

Posted 23/2/2017

HMRC have announced a major overhaul of the Self Assessment system which will involve an end to the Tax Return.

Indeed bot the Tax Return, heaps of paperwork and time-consuming forms could soon be a thing of the past, as HMRC shake up their out-of-date and often confusing processes.

Many small businesses could be using the new tax system as early as 2018 while the changes are likely to be phased in entirely to all by 2020.

So what are the changes that you need to know about?

1. No more annual Tax Returns

There is often a stressful last minute rush to get all your paperwork together and to the Accountant so he or she can get the figures together and file the Tax Return on time to avoid a penalty. With this often comes a last minute shock of what needs to be paid in tax and only a few days to find the money and make the payment.

Of course, not everyone cuts it so fine, with many business owners organised enough to have it settled months in advance.

However, under HMRC’s new proposals, the annual return will be phased out, with Government saying “Everyone can expect a very different experience from the one they receive today — it will be simple, personalised and secure.”

2. HMRC will do a lot of the work

Under the proposed changes the self-employed and those submitting a Tax Return can also forget about having to update information that HMRC should already know such as the likes of pensions, employment or savings.

“HMRC will automatically use the information it holds, along with new data from third parties, to populate the digital accounts,” it is promised in HMRC’s guidance.

HMRC and Companies House will also be working more closely together to make registering a company easier.

3. In the place of Tax Returns comes Quarterly updates

With the move away from annual returns the self-employed and landlords will soon be required to submit quarterly updates BY DIGITAL means.

And although not compulsory to help taxpayers budget you will have the option to pay your tax on a pay as you go basis.

4. It’s time to Go Digital with your accounting records

Most landlords and the self-employed workers will no longer have the option of filing a paper tax return.

Reporting your income and expenditure will now have to be done via an online account using digital software. There are many of my clients who already maintain their records on easy to use bookkeeping software such as QUICKFILE but this could prove problematical for others. Luckily I’m here to help you.

5. Your Online account

All taxpayers will have to have their own online account which will give you an overview of their taxes across multiple liabilities. It’ll be an up-to-date view of their tax position.

You as the taxpayer will be able to let me (agents) manage your account on your behalf (while still being able to see your account), giving the self-employed and landlords an opportunity of removing all the stress of managing your taxes.

With quarterly reporting it will be possible to link the digital accounting software to the new digital account.

 

So those are the changes and they are coming soon, as early as April next year to many taxpayers. This means that we all need to start preparing now, especially with the move to digital record keeping as there won’t be any alternative.

I can help you with everything you need, from setting up the right package to training how to use it to acting as your agent when it comes to submitting the figures and dealing with HMRC – just as I do now.

I can also maintain your digital records for you making life even easier !

 

Click HERE to get in touch and see how I can help.

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