Budget 2017 – Making Tax Digital

The previously announced “Making Tax Digital”, which will fundamentally change the way taxpayers report their income/expenditure to HMRC is due to be introduced in April 2018.

The system will require taxpayers to report their income/expenditure on a quarterly basis by using their own secure online digital tax account.  The idea is that the tax system operates much more closely to real time and there will be less risk of errors in the system, which reportedly cost the government over £8 billion a year.

A welcome delay was announced today however, for smaller businesses who will now have a further twelve months to prepare for quarterly reporting under “Making Tax Digital”.

Previously all unincorporated businesses with turnover over £10,000 were to be required to use the digital service from April 2018.

A twelve month delay for those businesses with turnover under the VAT threshold will be very welcome news for many smaller businesses, who will now not be required to use the digital service until April 2019.

The introduction dates are now as follows:

April 2018

Unincorporated businesses and landlords with turnover in excess of the VAT threshold

April 2019

Unincorporated businesses and landlords with turnover below the VAT threshold

April 2020

All incorporated businesses and landlords

Businesses and landlords with turnover under £10,000 are exempt from these requirements, however those in employment who have secondary income of more than £10,000 per year will not benefit from this exemption.

If you would like to discuss your options and prepare for “Making Tax Digital”, please get in touch with your usual contact.

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Nov 19

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Cloud accounting provides us with a real time view of our business accounts at anytime and from anywhere. Sales and purchase invoices are easy to input in a user friendly way, and the bank account link allows us to pull across electronic bank account statements automatically. Reporting in cloud is so easy and at a glance the dashboard shows account balances, invoices owed to you and bills needed to pay, straight away highlighting any action required. You can quickly see the profit and loss account, balance sheet and all other reports, and can drill down into individual transactions. Our main server has also moved to the cloud, which has revolutionised the way we manage our business. As a small business with a couple of employees it allows us to spend more time tending to clients and less time managing accounts and systems, allowing us to work at home or on customer sites without having to go back to the office. The savings and benefits are SO DRAMATIC and INSTANT in terms of time required for data input.  Time spent on all of this is now LESS THAN 2 HOURS PER WEEK, and this would be impossible with our old systems and procedures.  Our profitability has increased too as we can now spend more time working on projects rather then admin.  Mike Potts, Ashwood Design

 
-- Mike Potts - Ashwood Design