The Government is committed to reforming the current tax system to bring it into the digital age and has begun various consultations with results expected at the end of this year.
Changes are proposed to come into force in 2018, requiring businesses and landlords to record their income and expenses digitally, plus updating HMRC at least quarterly. Digital accounts for individuals have been available from 2016 and it is expected that by 2020, most taxpayers will keep records using digital accounts. The new system is envisaged to operate more closely to ‘real time’, keeping tax ‘in one place’ and reducing the risk of missed deadlines or unnecessary time delays.
From 2020, it is proposed that limited companies will be also required to report quarterly.
Businesses (or their agents) will be expected to use digital software and apps to record and submit their business transactions. HMRC is consulting on possible free software options to use in the process.
Under the current proposals, the quarterly reporting rules would not apply to businesses and landlords with a turnover of less than £10,000 p.a.
The proposals represent significant changes to the current tax system and we expect there to be several announcements before final plans are in place. One thing is certain – the digital revolution is here for taxpayers and will be introduced one way or another. Curo will keep you up to date with the latest developments.
If you would like to discuss how the proposals (as they stand) affect you and your business, please call Helen Sewell on 01527 558539 or email [email protected].