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Making Tax Digital

There are major changes afoot in the tax world – it’s all going digital and businesses will have to file tax records quarterly instead of annually.

From April next year, all businesses, self-employed people and landlords who meet VAT thresholds will have to start filling in their tax returns online. This is called Making Tax Digital (MTD) and is part of an ongoing drive by HMRC to modernise the tax system.

The Key Features of Making Tax Digital
  • It’s mandatory. This means that it will be a legal requirement to fill in your tax forms online rather than using pen and paper.
  • Quarterly Reporting. This means that you will have to send your records of everything you earn and spend relating to your company, self-employed work or property, to HMRC every three months rather than once a year.
  • It applies to all businesses, landlords and self-employed people with an annual turnover above the VAT threshold. Businesses that have an annual turnover below this level have been given an extra year and do not need to go digital until 2019, although they can still do so voluntarily.
  • Each business, landlord or self-employed person will have a Personal Tax Account. This means that all the relevant financial information will be stored in one place online which you should be able to access at any time and not just during normal office hours.
  • Your Personal Tax Account can be updated during the course of the year, as HMRC will be updating its records in real time. So if you have been overpaying or underpaying your tax this should come as less of a shock and should be comparatively easy to put right.
What You Need to Do

Orwell Accountants can ease you through the process. We will talk you through the changes so they should not hold any fears for you.

The MTD Software

Orwell Accountants uses software that prepares MTD returns and submits them to HMRC in the required format. We use top UK tax accounting software from providers who are highly experienced in helping accountants, individuals and businesses deal with any tax issues.
The simple, effective software programs we use will take you through the process of filling in your tax return online. If you supply the information asked for, it will automatically do the rest. When you record your income and expenses, this will then help you finalise your tax position and any other obligations you need to meet under the MTD scheme.

The software will also give you reminders of when you need to submit your next Quarterly Report, and can also be integrated with other tax and accounting software.
If you want to keep ahead of the game, why not start keeping digital records now?

Orwell Accountants will be happy to advise you if you want to take your first steps into digitising your tax returns.