About Making Tax Digital
In 2015 HMRC issued a paper `Making Tax Digital` which proposes that by 2020 HMRC will have moved to a fully digital tax system.
What this means to you…
The roll-out of the initiative has already begun. Every small business owner and individual taxpayer now have access to a digital account that they can use to check their records and manage their details with HMRC. By the end of 2018, it is envisaged that all businesses will be updating HMRC quarterly for their income tax and national insurance obligations through their online portal.
The upshot of these changes is that you’ll be required to use digital tools, such as software or apps, to keep records of your income and expenditure. Once the software has compiled the relevant data, it can then be submitted directly to HMRC. The most efficient means will be to have the records online in the cloud.
So we and our clients need to aim for there to be no more boxes and bags of records within the next 3 years.
HMRC have made an assumption that their 'Making Tax Digital' system is what the taxpayer wants and that it will reduce compliance fees. What they seem to have missed is that many businesses will need to invest in computer hardware, software and possibly a bookkeeper, which will increase costs.
Cloud-based accounting will mean accounts and financial information, whether monthly, quarterly or annually, can be produced more timely, and changes the dynamics of preparing accounts and record keeping.
To enable our clients to move towards 'Making Tax Digital', we are looking into ways to streamline the way you keep accounting records, by offering an online cloud service to keep the additional compliance costs down, or if you require where we can maintain the records. The new system will enable your bank data to be directly inputted to your accounts on a daily basis, you will also be able to send a photo from your phone or tablet of a purchase invoice/receipt and it will be posted automatically. The benefit of this is instant access to up-to-date accounts, where you can see your results, who owes you money, who you owe money to and your business bank balance, 365/24/7, all from your smartphone and what’s more, there are no more software upgrades to pay for or computer problems to encounter.
The first step in the process is the publication of our app where you can find information and contact us. On the app there will be a portal where you will be able to access your accounts, returns and correspondence, making it easier and quicker for you.
The app is available under 'Chappell Associates' on the App Store and Google Play or scan the QR code shown here.
We will keep you informed of the next step in your journey to 'Making Tax Digital', which will be easier if the app is downloaded to your smartphone or tablet.
Download our free guide for Making Tax Digital!