From 2018 onwards, small businesses, the self-employed and landlords with annual income of £10,000 or more will be required to keep track of their tax affairs digitally, under HMRC’s Making Tax Digital (‘MTD’) initiative.
Businesses will have to use digital tools such as software or apps, to keep records of their income and expenditure. These will be used to update HM Revenue & Customs (HMRC) at least quarterly via their digital tax account.
HMRC have set an ambitious timetable to make tax digital, with it due to apply to income tax Insurance Contributions and Capital Gains Tax from April 2018, VAT from April 2019, and Corporation Tax from 2020.
Whilst there are many practicalities which HMRC will need to iron out before their digital vision becomes a reality, with £1.3bn committed to the project, it is clearly the future.
As a digitally advanced practice, Magma are ideally placed to prepare you for the changes ahead.
If you would like to discuss, or want help, call David Nash or Andrew Wilson on 01788 539000.