Making Tax Digital

Making Tax Digital – Payroll Services in Bristol, Birmingham, Gloucestershire and London

Making Tax Digital is part of the government’s plans to make it easier for individuals and businesses to get their tax correct.

HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

· more effective

· more efficient

· easier for taxpayers to get their tax correct

Making Tax Digital for VAT

HMRC has taken a major step forward in this ambition with the introduction of Making Tax Digital for VAT.

VAT-registered businesses with a taxable turnover above the VAT threshold are now required to use the Making Tax Digital service to keep records digitally and use software to submit VAT returns for VAT periods that started on or after 1 April 2019.

The exception to this is a small minority of VAT-registered businesses with more complex requirements.

Income Tax

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you are a self-employed business or landlord you can voluntarily use software instead of filing a Self-Assessment tax return.

Helping businesses, self-employed people and landlords get it right first time

The majority of customers want to get their tax right but the latest figures show that too many find this hard, with avoidable mistakes costing the Exchequer over £9 billion a year. The improved accuracy that digital records provide, along with the help built into many software products and the fact that information is sent directly to HMRC from the digital records, avoiding transposition errors, will reduce the amount of tax lost to these avoidable errors.

Having listened to concerns about the pace of change, particularly for small businesses, the government has said that the pace would be slowed and that Making Tax Digital will not be mandated for taxes other than VAT until at least April 2020.

The primary legislation for Making Tax Digital relating to VAT and Income Tax is contained in the Finance (No.2) Act 2017, providing certainty about the broad framework in which Making Tax Digital will operate, with secondary legislation for VAT laid in February 2018, coming into force from April 2019.

Smarter experience for individuals

The Personal Tax Account brings together each individual customer’s information in one online place. It allows customers to access the service from a digital device of their choice and at a time that suits them. It allows them to register for new services, update their information and see how much tax they need to pay.