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Making Tax Digital

On 31 January 2017 HMRC published draft legislation relating to their Making Tax Digital project.  This begins the process of fleshing out the detail of the Government’s vision, originally stated in the Budget 2015, of a transformed tax system.  The aim is that by 2020 the tax system will be fully digital making it more effective, more efficient and simpler for taxpayers.

The 31 January announcement made it clear that self-employed people, partnerships and some landlords will be required to start using the new digital service from April 2018.  For most businesses compliance will not be mandatory until April 2020.

Individuals in employment and pensioners will not have to use the digital service unless they have secondary incomes of more than £10,000 per year from self-employment or property.

Those people affected will be required to keep records of their income and expenditure digitally, and send summary updates quarterly to HMRC via a computer or smart phone.  HMRC’s aim is to collect and process information relating to tax as close to real time as possible.

Our software is continuing to be improved to integrate with the new systems that HMRC are developing.  As legislation is passed we will work with our developers who are currently trialling the software with HMRC.

Want to talk about Making Tax Digital?  If you have questions about the proposed changes or are concerned about being digital ready please call either Steve Nicholls or your usual contact here at Botham Accounting 0115 9508887 [email protected].