HMRC have today made a new announcement about changes to the timescales and roll out of it’s Making Tax Digital Scheme.
- Only businesses with a turnover of above the VAT threshold will have to keep digital records and only for VAT purposes. They will only need to do so from 2019.
- Businesses will not be asked to keep digital records or update HMRC on a quarterly basis for other taxes until at least 2020 (instead of next year (2018))
- Small Businesses will be able to digitally file on a voluntary basis for other taxes.
This a great relief to myself and many other bookkeepers and accountants as it gives the software companies like Sage and Xero more time to find out exactly what will be required for the digital reporting and amend their software to allow users to make submissions in much the same way that you can for VAT returns and payroll taxes now.
If you currently use a manual accounting system or leave all your reporting to be done after the year end each year in a ‘just in time for the tax return’ way then you have more time to sort out your record keeping and systems so making tax digital will not become a huge shock for you. This delay though should not stop you from looking at your systems and looking at where they can be automated and improved through the use of suitable software.
We are happy at Silicon Bullet to have an informal chat with you and to look at your current accounting system to see if we can advise on improvements. 2020 will come around quicker than you imagine.
Below is a video produced by Xero about Making Tax Digital which gives you more information about these changes and gives their view of the changes.
And an information video about why you should be thinking about the implications from Sage.