Making Tax Digital is intended to bring the UK tax system into the 21st century by providing businesses with a modern, streamlined system to keep their tax records and provide information to HM Revenue & Customs (HMRC). The timetable for rolling Making Tax Digital has been amended to ensure that small businesses have more time to prepare for the changes. The first to be affected will be small businesses and individuals with a turnover above the VAT threshold of £85,000, who will be required to keep digital records for VAT purposes from April 2019. Making Tax Digital is intended to help you keep better track of how much tax you owe – or how much you are due back – throughout the financial year.
- Accurate Tax Information Replacing paper-based bookkeeping with digital tax accounts will let you check the information HMRC holds about you is 100% correct.
- Reduced Errors Making Tax Digital’s new reporting function will allow HMRC to look at your tax information almost immediately, reducing human error from data input.
- Easier to understand HMRC anticipates taxpayers will better understand how much tax is owed within the digital tax account – much like online banking.
- Easier contact with HMRC