Businesses need to act now ahead of HMRC’s sweeping changes to the tax system, known as Making Tax Digital (MTD).
MTD, an initiative to compel businesses to keep digital records and file quarterly updates, has a launch date of April 2018 and will undoubtedly have huge implications, particularly for small businesses and the self-employed who will be the first affected.
In introducing this new regime HMRC is aiming to change from information being gathered in a single annual tax return and instead being replaced with quarterly reports submitted digitally.
When MTD is fully implemented there will be no more self-assessment tax returns, apart from exceptional circumstances, and software will need to be in place together with businesses’ accounting systems, and their accountants, properly prepared for the changes.
Nationally it has to be said MTD has received criticism, with a recent survey suggesting that the overwhelming majority of small to medium sized businesses – those who will be required to comply first – have no idea what the scheme is and how it will impact their operations.
Parliament too have reacted negatively to the plans, with the Lords Select Committee calling for MTD’s implementation to be pushed back by a year to April 2019. However, HMRC seems determined to stick with the April 2018 start date and that is what businesses and their advisers should concentrate on.
Here at Thomas Westcott, regardless of what’s happening nationally, are focused on HMRC’s current timeline and are advising our clients to act now to put appropriate systems in place ahead of spring 2018.
What’s more, we understand that the changes to digital record keeping are a big challenge for many tax payers, which is why we have ensured there are fully trained experts within our firm to help clients choose, implement and then use the most suitable software packages.
In the run up to MTD’s introduction we will also be running a series of seminars in the spring. To keep up to date with when those seminars will take place just keep an eye on our Twitter page @thomaswestcott.