Making Tax Digital
The world is evolving quickly, and more of our everyday tasks are becoming digital. Making Tax Digital (MTD) is one of the steps ahead in this process.
HMRC’s aim is to become one of the most advanced tax administrations in the world, by modernising the tax system to make it easier for the public to access it. They plan to make it easier for individuals, and businesses like you, to get your tax right and keep on top of your financial affairs.
Everyone will be given their own digital Personal Tax Account, which means that you can easily log in and see all the information that HMRC holds for you, and be able to check and edit your details at any time.
HMRC will collect and process information affecting tax as close to real time as possible, to help prevent errors, and help prevent overdue or overpaid taxes. This will indirectly aid in avoiding penalties and surcharges.
By 2020, HMRC also aims to provide better digital support via their website, such as web chats.
Though many say that this is the right approach, there have been a few concerns voiced. As a result, the government has announced that the roll out for Making Tax Digital for Business has been updated.
Now, businesses above the VAT threshold will not be asked to use the Making Tax Digital system until April 2019. Smaller businesses will not be required to use the system, but they can do so voluntarily. The government has also stated that it will not widen the scope of Making Tax Digital beyond VAT before the system has proven to work well, and not before April 2020 at the earliest.
We will be reviewing MTD in more detail and the potential impact on our clients in future blog posts so watch this space, for more information now, check out the HMRC overview here.