5 ways ‘Making Tax Digital’ will affect you.

If you don’t think this affects you, think again!

In 2018, the government is expecting the process of filing accounts to be completely digital. Whether you are digitally competent or not, that’s the way it will be. The document is in final consultation at the moment, but the changes from the proposals will be minimal. What does this mean for you? Well, we’ve listed 5 major ways this will be part of your business from 2018.

  1. Information will need to be filed quarterly. Yes every 3 months there is a requirement to get all the documents in a suitable form to send to HMRC.
  2. You’ll need software that sends the information to HMRC. Oh, and a scanner. Or both. Or the ability to use a mobile device with software attached.
  3. You’ll need to know whether a document is allowable as a business expense and whether it’s best to offset this against that. Good at bookkeeping or accountancy? You’ll probably need to have some understanding of what goes where in the books. Got the time to do all this? Probably not.
  4. One benefit that this will probably have is to sharpen the focus of most businesses so that they know where they are more regularly and  break down of the end of year paperwork into 4 more manageable pieces.
  5. There will be huge margins for error here, as most likely any software will err on the side of caution and not allow items against tax, so there’s a huge expectation that businesses will just accept its interpretation and that of HMRC, to increase the tax income to the Government.

Our opinion at BAS Associates is that however and whenever the Government decides to proceed with Making Tax Digital (MTD) it’s likely to be a huge burden on millions of businesses. However, this is the future of everything – digital – and like many others that were previously paper, this will happen sooner or later. We can’t argue with the outline proposals, but there are many things to iron out. The timings and transitions are ambitious, to say the least. The accuracy of the submissions is likely to be under scrutiny and we think that HMRC will be overwhelmed by the amount of queries and demands for help.

Will our job as your accountant be affected? Certainly, but probably for the better. We’ll have a closer eye on your business affairs, which is healthier for you as well, and the work will be spread out over the year rather than at one time.

There’s plenty more to come on this and we’ll keep you updated as it progresses. If you have any queries, give Dawn or Brett a call and we’ll try to help as much as we can.

BAS Associates are accountants based in Northchurch, Herts and Dibden, near Southampton and the
New Forest. We are also happy to help clients including nearby locations as Chesham, Tring and Berkhamsted, as well as an area encompassing Maybush, Dibden Purlieu, Nursling, Hythe and Hillyfields.