MAKING TAX DIGITAL
HMRC’s overarching mission is for the new system to make things simpler and easier for taxpayers whilst also reducing its overheads for managing tax affairs. The "new and improved" tax system will require the majority of business owners to maintain digital records using compatible software.
Taxpayers should not have to give HMRC information that it already has, or should be able to get from elsewhere — for instance, from employers, banks, building societies and other government departments. Taxpayers will see the information that HMRC holds through their digital tax accounts, and be able to check at any time that their details are complete and correct. HMRC will use this information to tailor the service it provides, according to each taxpayer’s individual circumstances.
TAX IN ONE PLACE
At the moment, most taxpayers cannot see a single picture of their liabilities and entitlements in one place. HMRC is changing that. By 2020, taxpayers will be able to see their complete financial picture in their digital account, just like they do in their online banking. And they will be able to set an over-payment of one tax against the under-payment of another: it will feel like paying a single tax.
MAKING TAX DIGITAL FOR BUSINESSES
Businesses should not have to wait until the end of the tax year or even longer before knowing how much tax they should pay. HMRC will collect and process information affecting tax in as close to real time as possible, to stop tax due or repayments owed from building-up. From April 2018, businesses, including everyone who is self-employed and those letting out property, will update HMRC at least quarterly where it is their main source of income (or a secondary source of income above £10,000 and their main income is from employment or a pension).
MAKING TAX DIGITAL FOR INDIVIDUAL TAXPAYERS
By April 2016, every individual and small business will have access to a digital tax account. The digital accounts will present individual taxpayers with a personalised picture of their tax affairs, along with prompts, advice and support through webchat and secure messaging.
CLIENTS WHO PREFER PAPER BASED SYSTEMS
We are working closely with professional bodies and HMRC to sort out agent access so that we can continue to provide a high level of personal service to our clients. The main difference for clients who prefer paper based systems is that we need to see their records quarterly, rather than annually. To ensure everything continues to work smoothly, we will send timely reminders with details of any documentation that we need to see.
CLIENTS WHO MAINTAIN RECORDS IN A DIGITAL FORMAT
The market for cloud based accountancy products is becoming ever more competitive and we are challenging software houses to make sure their products are fit for purpose – simple and easy for clients to use. While some clients may be just thinking about starting the digital journey, others may be thinking about upgrading their existing systems and other may be happy to stick with what they know. Either way, we will continue to provide the same high level of personal service tailored to suit client needs and requirements. The main difference for clients using digital recording systems is that they will have to ensure everything is up to date and ready for submission on a quarterly basis. More details of HRMC exact requirements will follow in future client briefings.
Kennedy Legg: 2nd Mar 2017 09:00:00
We are looking for an experienced Receptionist to join our team at Kennedy Legg.
Changes to our Website
Our website is being improved and will shortly include a facility for file sharing and secure messaging between Client and Accountant.
Making Tax Digital
HMRC’s Making Tax Digital (MTD) initiative is set to transform the way that accountants work with their clients. Starting from 2018, this new digital tax system will revolutionise the tax return as we know it for both individual and business. The main aim is to make tax administration more effective, efficient and easier for taxpayers through the implementation of a fully digitalised tax system. The changes will apply to a wide range of taxpayers, including most businesses, self-employed professionals and landlords.
Company directors are the victims of one in five cases of identity fraud, according to fraud prevention organisation Cifas. They account for 19% of victims of these type of fraud cases, despite making up less than 9% of the UK population.