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Making Tax Digital – The Basics

By August 3, 2018No Comments

By 2020, HMRC plan to abolish the tax return

1. what are the changes and will you be ready?

The ultimate change is that most businesses and self-employed people including landlords VAT registered with VAT-able turnover of £85,000 or more will be required to keep digital records of trading and transactions from April 2019 on-wards and will need to update HMRC on a quarterly basis, as a minimum.

Only 47% of businesses currently use bookkeeping software.
That means thousands of businesses need to make the change.

No Software

28%

Excel

25%

Use Software

47%

2.

What are the expected challenges?

Businesses that currently keep paper or spreadsheet records will need to move to a software package or app to maintain tax affairs and keep HMRC updated.

3.

Time limits to update HMRC

For quarterly updates, businesses will have one month to compile and declare the period’s data.

All businesses will have nine months from the end of their period of account to complete their end of year activity.

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