Making Tax Digital is a government scheme to encourage people to go digital and to enable more regular reporting to HMRC about finances.
From April 2019 all businesses above the VAT threshold (£85,000) will need to use software to submit quarterly returns online.
From April 2020 all businesses, including sole traders and partnerships with income between £10,000 and £83,000 will need to use software for corporation and/or income tax. Tax summaries will need to be submitted at least quarterly through software.
The fine details of exactly what will happen are still being determined as trial runs currently are underway but now is the time to determine whether or not this is likely to affect you and what you can do to prepare.
There also is a plan to further move non businesses and landlords from self- assessment towards personal tax accounts where a lot of the information will be automatically updated i.e. via software and the information HMRC already has submitted to them.
If you are already using a recognised accounting package this is unlikely to cause any major impact; however if you are keeping manual records it would be better to think about this sooner rather than later as choosing software, getting set up and uploading previous data can all take time.
At Valhalla we have Xero certified advisors and would recommend this as a great product that not only covers compliance but can also help you move your business forward for a very reasonable price.
Contact us if you have any questions about Xero, Bookkeeping, Accounts, Tax or other advisory services.
More information on Making Tax Digital can be found on the HMRC website.