Is your business ready to Make Tax Digital?
Guest blogger, Tax Director Martin Tomes of Midlands-based HSKS Greenhalgh (chartered accountants and business advisors) discusses new digital tax requirements for businesses.
As part of the governments’ digital agenda, all businesses will soon be required by law to hold online records as the digitalisation of tax becomes fully embedded across all sectors and sizes of business.
Simply named ‘Making Tax Digital’ (MTD) the new requirement represents the most significant change to the administration of the UK tax system since the introduction of PAYE in 1944. It will affect all businesses, including rental business and individual landlords, with gross turnover exceeding £10,000 per annum.
A huge scale project which is all about trying to get 3.5m individuals to keep records and to file data in a wholly different manner from what they’ve done before, MTD is likely to have the largest impact on small businesses which may not be prepared for the change. They will be required, just like large businesses, to maintain records in a digital format and file quarterly submissions of financial records to HM Revenue & Customs.
This will undoubtedly be a huge shift for smaller businesses which are used to sending their tax information back at the end of the year via the self-assessment form. Switching to a quarterly basis will involve planning ahead, making sure all records are fully up to date on an ongoing basis and getting to grips with the new digital system.
The timing of when each business must comply with the new MTD requirements will be dependent upon business structure and turnover, however the first businesses must comply from April 2018.
If you or your agent have yet to consider the implication of these new requirements and how you are to meet them, you should do so as soon as possible. You can contact one of the HSKS Greenhalgh MTD team at www.hsksgreenhalgh.co.uk if you would like further details.