Market Deeping accountancy firm says it is time to get ready for next stage of digital taxation
Hundreds of thousands of VAT-registered businesses across the UK have already had to get to grips with the Government’s making tax digital scheme for the recording and reporting of VAT, writes Matt Upex of Moore Thompson.
However, from April 2023 this initiative is being extended to income tax for many more taxpayers, including the self-employed, partnerships and landlords (with annual business or property income above £10,000).
Making tax digital for income tax will require these individuals to report income using HMRC compliant software on a quarterly basis, as well as submitting an annual tax return.
The additional quarterly summaries introduced under this new regime will be fairly onerous for many taxpayers and will require investment in new cloud-based accounting software in many cases.
Some businesses are already using compliant software to keep digital records, which may make this transition simpler for those with this experience, but there is still likely to be a period of adjustment to these new rules.
If you are self-employed or a landlord you can voluntarily use software to keep business records digitally and send income tax updates to HMRC instead of filing a self-assessment tax return.
HMRC is currently piloting this system with a select number of taxpayers to develop an effective making tax digital service for income tax.
Although this change over may seem some way off, our experience from the previous implementation of making tax digital for VAT is that training and preparation for the new system is key to a stress-free transition.
At Moore Thompson, we have spent years building and developing a dedicated team to deal with the complexities of making tax digital and champion the benefits of cloud accounting.
MT Cloud is helping hundreds of businesses and individuals move their accounting systems online, finding new ways to improve their financial functions along the way through automation and the delivery of up to the minute business intelligence.
My advice to those affected by the next stage of making tax digital is to take action today by speaking with an accountant that specialises in cloud accounting and who has a good understanding of the new rules.
To find out more about how Moore Thompson can help you, visit www.moorethompson.co.uk