After much uncertainty, the government’s ‘Making Tax Digital’ scheme has been delayed – but it will still be happening, so let’s use that extra time to prepare!
Although most of us feel it is a great idea, there were concerns that the original date of 2018 was just too soon, and after pressure from accountants, business leaders, and software companies such as Xero, the key date has been pushed back by at least a year for most businesses.
Businesses affected will have to maintain digital records of their finances, and submit them quarterly with a final fifth report each year.
This must be done either online, through desktop software with an internet link, or by our recommended option of cloud accounting software such as Xero which makes the process much easier.
From 2019, businesses that turnover more than the VAT threshold (currently £85,000) will need to keep digital records (for their VAT only).
From 2020 – all other businesses will have to maintain and submit their complete tax records.
At some point, every tax-payer will have their own account in addition to business accounts.
There aren’t many exemptions, but businesses with a turnover of less than £10,000, charities, and Community Amateur Sports Clubs will likely be exempt, along with groups who are ‘digitally challenged’ due to their beliefs.
The deadline may seem like a way off, but we recommend businesses act as soon as possible.
Making Tax Digital is a great idea for our economy – increased efficiency, replacing the outdated and complicated current systems of tax collection, and the prospect of fixing the £8 billion tax gap, are all appealing prospects.
However, going digital with your tax records also has numerous benefits for your business:
The sooner you make this changeover, the sooner you can reap the benefits – and of course, it will mean you are completely prepared when the changes become enforced.
At Cornish Accounting Solutions, we are ready to assist you. We are award-winning partners of the fantastic Xero cloud accounting software – this will make the changeover hassle-free, and transforms the chore of submitting returns into a simple process of a few clicks.
For more details, we run regular free seminars about Making Tax Digital and cloud accounting. Contact us to book a free place, or to discuss how we can help you.
The digital tax train will be leaving the station! Don’t get left on the platform – climb on board early, and find yourself a comfy seat.
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