Paul Underwood, Director
tel: 023 9248 4356
For readers who are self employed or have additional earnings, for example rental income from a property you let out, the annual task of completing a tax return will be a familiar one.
Self assessment has been around for the past 20 years but is now about to undergo a complete transformation as part of HMRC’s Making Tax Digital (MTD) plans. Its aim is to encourage digital record keeping to reduce errors and make tax administration more efficient and easier for taxpayers through the implementation of a fully digital tax system.
It will also mean the end of the annual tax return as this will be replaced with the requirement to file income and expenses quarterly via the new digital service.
For individuals, the government intends to phase out self assessment by 2020. The personal tax account system is already live and can be used to access a range of HMRC services.
Small businesses and landlords that have an annual turnover below the VAT threshold (£85,000) have until April 2019 before they are required to keep digital records and send HMRC quarterly updates.
HMRC have yet to provide full details on how the scheme will be implemented and, as accountants, we will be carefully following developments over the coming months.
We will be pleased to answer any concerns you have about digital reporting and can provide online accounting software to help you get ready for the new regime.