Making tax Digital

Posted on 01/09/2016 at 10:18

The Government intends to force all businesses, both large and small, to keep records electronically and make quarterly Returns.

This will affect unincorporated business with income of £10,000 per year or more. Those which currently do not use software to keep financial records will be required to do so. However, it seems Limited Companies will have to use digital record keeping, no matter what the level of income.

This new regime will also include landlords who receive rents of more than £10,000 per year. These new rules are to be phased in from April 2018, when certain businesses will be required to update the Revenue, at least quarterly, with their financial information digitally. The Revenue intend to have all businesses in the new regime by 2020.

It is also intended that individual taxpayers and small business should have access to a digital tax account.

These digital accounts are supposed to present individual taxpayers with a personalised picture of their tax affairs.

By 2020, it is the Revenue’s intention that taxpayers will be able to see their complete financial picture in their digital account, similar to their online banking account. To quote from the Revenue “they will be able to set an overpayment of one tax against the underpayment of another: it will feel like paying a single tax”.

Given our past experiences of dealing with the Revenue as various new systems have been introduced, we are all slightly apprehensive to say the least.