HM Revenue & Customs (HMRC) has published new information about how the UK’s self-employed community, small businesses and property landlords will benefit from the tax authority’s Making Tax Digital project, designed to futureproof the UK tax system.
As a result of extensive consultation, having received more than 3,000 responses in the last eight months, HMRC has released its vision for digitising the tax system, assisting millions of businesses to get their tax liabilities right at the first time of asking, without the need for annual tax returns.
Jim Harra, Director General of Customer Strategy and Tax Design at HMRC, said: “We know that the majority of businesses want to get their tax right first time, but the latest tax gap figures show that too many find this hard, with more than £8 billion a year lost in tax as a result of avoidable taxpayer error by small businesses.
“Making Tax Digital will help businesses to get their tax right first time; it will help reduce the likelihood of errors, lower the chance of unwelcome compliance checks and give them greater certainty that they are getting things right.
“There were more than 3,000 responses to the consultations and I’d like to thank everyone for their time and effort.
“The appetite for digital services is growing and traditional paper-based processes make no sense in the 21st century where the vast majority use digital services.”
April 2018 remains the deadline for introduction of Making Tax Digital, following a new series of pilot schemes with businesses across the UK, which begin this April.
HMRC has also published responses to six consultation documents received in August. To provide greater clarify, HMRC confirms that taxpayers will be able to do the following within the Making Tax Digital programme:
- Self-employed professionals and property landlords with a turnover less than £10,000 a year will not be forced to keep digital tax records, although they can do so if they wish
- HMRC will extend the ‘cash in, cash out’ basis for income and expenditure for an additional 2.5 million self-employed firms and unincorporated landlords
- Charities will not be forced to maintain digital or quarterly tax records
- Business unable to go digital with their tax reporting will not be legally forced to do so
- Taxpayers will have a minimum of 12 months to familiarise themselves with the digital tax system before any penalties for late tax returns are applied
If you are yet to complete your annual tax return – don’t panic. Your local TaxAssist Accountant can work with you to swiftly calculate your tax liabilities for the 2015/16 financial year and minimise the number of late submission penalties incurred from HMRC.
Call us today to make an appointment on 0800 0523 555 or drop us a line using our online enquiry form.