28
September
2017
Golf Clubs will have to start preparing for HMRCs planned changes. In a bid to make tax more ‘real-time’, the HMRC is Making Tax Digital (MTD) by 2020, and it has a timetable for its introduction even though the details are still being worked out. Millions of businesses and golf clubs already manage their tax digitally: 98% of Corporation Tax returns and 99% of VAT returns are submitted online, and HMRC has delivered digital accounts to millions of small businesses. Since April 2016, all the UK’s five million small businesses have had access to their own digital account. By 2020, most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account. These changes will be introduced for some businesses from April 2019, and will be phased-in by 2020, to allow businesses time to adapt. Businesses will be required to use digital tools, such as software or apps, to keep records of their income and expenditure. HMRC claim that free apps and software products will be available, but many businesses and their advisers will choose to use commercially-available tax software packages to ensure they are ready. This kind of software, that compiles tax data as part of their day-to-day activity, highlights possible errors (for instance, arithmetical mistakes or figures which look out of place) and offers prompts for information that might otherwise be overlooked. Once the relevant data has been compiled, businesses (or their agents) will feed it directly into HMRC systems. The ambition of the HMRC is that by updating them directly in this way is intended to be secure, light-touch and far less burdensome than the tax returns of today. Currently information on tax returns and pay liabilities are reported on long after the end of the tax year. This move is part of the governments changes to the tax system so that it operates much more closely to ‘real time’. Business will be able to see their ‘digital accounts’ which will show a real-time view of their tax and a calculation of the tax due. By reporting information closer to real time, “businesses will find it easier to understand how much tax they owe, giving them far more certainty over their tax position and helping them to budget accordingly”. The government is continuing to consult on options to simplify the payment of taxes, including whether to align payment dates and bring them closer to the point when profits arise, so that businesses make a single regular payment that covers all the tax that they owe. MTD Timetable 2019: VAT registered business are mandated into MTD with the exception of the digitally excluded. 2019/2020 all businesses may try MTD on a voluntary basis. 2020: non-VAT registered unincorporated business and landlords join MTD. 2020+ Companies and Large Partnerships to join MTD. Note that the digitally excluded and micro businesses (t/o currently less than £10,000) are excluded from MTD. Please LOGIN to read the full article.
Not a member? Please click here to join today.
