What is it all about?
Her Majesty’s Revenue and Customs office, hereafter known as HMRC, have set us (and them) a rather large task – to get us all online with our tax in the next three years.
This will hopefully make the whole process of tax collecting simpler, faster and cheaper. Which of course benefits all of us in the long run as we won’t have to pay for the vast apparatus and staff currently centred in Newcastle. And maybe more importantly for all those poor souls who have done this, wait for hours on the phone in the call queue to speak to an adviser.
Described by HMRC as ambitious and radical, ‘Making Tax Digital’ will involve a major overhaul of our current tax system. We are moving from submitting an annual tax return, somewhere between September and March, to digital (online) returns every quarter, with a fifth ‘end of year’ summary as the finale.
HMRC also want all businesses, self-employed people and landlords to move all their receipts, records and information relating to their tax and accounts online. So no more paper bags or plastic filing boxes that don’t really lock.
Who will be the first?
First to be affected by the change are all self-employed people and landlords whose gross annual rents are above £10,000. These two groups will be asked to put in their first of their four quarterly returns from April 2018.
Next will be all other businesses with a turnover over £10,000 per year. Your online journey will start by 2020.
Personal Digital Tax Accounts
Good news for all millennials and anyone who is a fan of mobile wallets! The plan is that all individuals and businesses will have their own personalised digital tax account as part of this. HMRC will make sure that they are prepopulated with any Government-held information about you that is relevant, (like state benefit payments, pension details, PAYE payments, tax credits and bank and building society interest). We aren’t sure at the moment when this will be.
We are all waiting for HMRC to release more details. As soon as we know more we will keep you all posted.
In the meantime, feel free to contact our tax team if you have any concerns – 01483 416232.