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The first stage of the government scheme ‘Making Tax Digital’ will start from April 2018. Now is the perfect time to think about how this might affect you and your business.
HMRC will be introducing the Making Tax Digital scheme from April 2018, where businesses and individuals will have to submit their financial data electronically.
How will I be affected?
- For larger unincorporated businesses who are VAT registered (turnover above £85,000), Making Tax Digital will come into effect from April 2018.
- For smaller unincorporated businesses who have a turnover less than the VAT threshold, Making Tax Digital will come into effect from April 2019.
Once you’re on the new scheme, you’ll have to electronically submit your records and ensure they are updated each quarter. Paper documents will no longer meet the legal requirements outlined by HMRC.
Limited companies will gradually be introduced to the Making Tax Digital scheme over a period of time. Quarterly reporting for VAT will start from April 2019, with Corporation Tax the following year in April 2020.
For people who pay income tax via Pay-As-You-Earn (PAYE), not much will change. However, you will be able to access your tax records online using a Personal Tax Account (PAT) similar to those who complete a self-assessment tax return.
Your employer will still manage your payroll, PAYE, National Insurance Contributions and any deductions such as student loans. You’ll be able to check the figures and ensure they are correct.
How can I prepare?
Businesses will need to keep their books and records digitally and submit information to HMRC every quarter electronically. This might mean changing the way you record transactions, editing your spreadsheets or looking into new software packages to help keep things simple.
For some businesses, the transition to Making Tax Digital will be straightforward. For others, you might want a bit of help and advice. There are a range of software options available on the market, with large providers offering a free package that has been developed specifically for this purpose.
How we can help:
At Crowther Chartered Accountants, we can help you every step of the way when it comes to the transfer to Making Tax Digital. Our friendly, professional staff are here to answer your questions and queries regarding every aspect of your accounts.
We anticipate that the most challenging of the changes will be the increased frequency of reporting; quarterly reporting could become very time-consuming. Our bookkeeping team could take over and let you get on with the day-to-day running of your business.
Our in-house bookkeepers who are experienced using a variety of different software packages, including:
- Sage
- Excel
- Xero
- Clearbooks
- Quickbooks
We can provide advice on which software might best fit your requirements and help you get up to speed with some training, either at our Huddersfield office or at your own premises.
As Making Tax Digital is introduced, we will be sure to keep you updated with any changes to the scheme, and how you might be affected. If you have any questions about income tax (either PAYE or self-assessment), VAT or about the accountancy services on offer here at Crowther Chartered Accountants, please feel free to get in touch. You can call the office on 01484 515544 or email together@crowther.accountants