By Neil Ormesher
In 2015, HMRC announced plans to transform the tax system. Their plan was to bring this up to date with the current digital age which will spell the end of the annual tax return.
As a result, Making Tax Digital (MTD) will be phased in from 2016 and is set to end in 2020. Initially, from 2018, unincorporated businesses and landlords will be required to keep track of their tax affairs digitally. They’ll also need to report this to HMRC at least every quarter, with the option of submitting more frequently. Limited Companies are expected to come into scope by 2020.Under current proposals, over a million businesses and landlords with an annual turnover of less than £10,000 will be exempt.
However, what is clear, is that all businesses will need to use digital tools. This will be online accounting software or apps, to keep a record of their income and expenditure.
Much of the accounting industry are concerned by these plans. Furthermore, many do not believe businesses can adapt by 2018. Well, we don’t agree!
In conclusion, we see the positives from this initiative. Because using digital tools to undertake your book-keeping can bring many efficiencies to a business and more importantly, give business owners timely information to help make those difficult decisions.
At Danbro, all of our accounting packages include access to an online accounting package along with an app. This helps businesses record their transactions on the go and gives them more visibility of their numbers along with access to their information from anywhere in the world.Currently, 90% of our clients already use an online accounting package and are prepared for MTD, we are working hard on the other 10%!
Why not speak to us to see how we can help? We see this as a real opportunity to get your systems ready for the digital future.