Making Tax Digital Summary
HM Revenue & Customs (HMRC) will be replacing the annual tax return with online, quarterly reporting for many businesses, self-employed professionals and property landlords. For small businesses and individuals with a turnover above the VAT threshold of £85,000, this could start as early as April 2018.
Why is HMRC introducing this?
Making Tax Digital is intended to help you better keep track of how much tax you owe – or how much you are due back – throughout the financial year.
- Accurate Tax Information
Replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct.
- Reduced Errors
Making Tax Digital’s new reporting function will allow HMRC will to look at your tax information almost immediately, reducing human error from data input.
- Easier to understand
HMRC anticipates taxpayers will better understand how much tax is owed within the digital tax account – much like online banking.
- Easier contact with HMRC
Making Tax Digital will make it easier for you to contact HMRC online via webchats and secure messages.
When will it affect me?
HMRC will gradually bring these changes in once it completes a pilot scheme that began in April 2017:
April 2018 – Quarterly reporting starts for businesses with turnovers more than the VAT Registration Threshold of £85,000
April 2019 – Quarterly reporting starts for businesses with turnovers below the VAT threshold of £85,000. Digital quarterly reporting for VAT also begins
April 2020 – Quarterly reporting for companies introduced
Please be aware that the above dates may be subject to change after Making Tax Digital was removed from a revised Finance Bill 2017 due to the snap General Election on 8th June. To keep up to date with the latest news about Making Tax Digital, please click here to a receive our newsletter.
Free Making Tax Digital Guide
To download a PDF of our bite-size Making Tax Digital guide for small businesses, please click the button below.
How we can help
Your local TaxAssist Accountant will work with you to prepare for Making Tax Digital. As small business owners ourselves, we fully understand what is required to manage your business records digitally. At TaxAssist Accountants, we've spent a great deal of time training and developing the right support services to help small businesses through this period of change.
HMRC will not be offering software to help you report quarterly, so we have already partnered with Intuit QuickBooks to help make managing your accounting records easy, wherever you are.
If you would like us to help you through these changes then call us today on 0800 0523 555 or contact us online here to arrange a free initial consultation.
The information provided above is based on current guidance from HMRC and may be subject to change. Please consult with your local TaxAssist Accountant before taking any action.