14 Jul Making Tax Digital – New Time Table
Making Tax Digital – Delayed for some businesses.
There has been a lot written about sole traders, partnerships, Limited Companies, Landlords etc having to make quarterly tax returns in an effort by the Revenue to accelerate the collection of tax and plug what they perceive to be a misreporting of income by tax payers.
The manner of doing this was to be via the requirement for all businesses to prepare their accounts and books and records in a digital format.
The original timescale for introduction was to have commenced in 2018, however, the scope and timetable have now been pared back following feedback and concerns about the broad scope and short timescales from parliamentary bodies, businesses, the accounting profession and software companies.
Only businesses with a turnover above the VAT threshold will have to keep digital records and only for VAT purposes.
They will only need to do so from 2019.
Businesses will not be asked to keep digital records or update HMRC quarterly for other taxes until at least 2020, instead of 2018 as originally proposed.
Small businesses will be able to file digitally on a voluntary basis for other taxes.
While this extra time to prepare is welcome we believe that the positive reasons for preparing records in a digital format should encourage business owners to adopt the digital format straightaway.
In our view the advantages of going digital include:
- Regular (monthly, quarterly) accounts can be prepared at the touch of a button enabling:
- Opportunity for tax planning
- Greater knowledge and control of how your business is doing
- Greater ability to manage cash flow, via prompt debt collection and immediate knowledge of who you owe money to.
- Saving of your time and therefore your money in that digital accounting programmes can be enhanced by a number of apps and add-ons such as:
- Automatic bank feeds (all of your transactions direct from your bank to your accounts
- Scanning of all invoices direct to your accounts system (no more laborious entry of supplier invoices onto your accounting system).
- Easy retrieval of information/invoices via drill down facilities. No more searching for that supplier invoice
- Automatic debt collection
- And many more
- Plus it’s going to happen anyway so why not be ready