Are you aware of tax going digital? By now, as a business owner, you should be more than aware of the suggested future of tax and the issues you need to address to be prepared.
If you are not aware of the changes to taxation, check out our previous blog about tax going digital to get a better understanding of the issues that could arise.
Tracking back to August 2016, HMRC released a series of consultations about tax going digital, the process involved and the outcome has eventually been released to the public. Making tax digital was a key part for the government to focus on in this ever growing digital age we are living in. As business owners ourselves wanting to get our taxes right first time, we saw the benefits of making tax digital where others didn’t so much.
With errors in taxes amounting to more than £8billion a year, it was about time something was done to change the way taxes are collected in the UK.
The consultation named ‘Making Tax Digital: Bringing business tax into the digital age’ covered basic topics including:
- How digital record keeping and quarterly updates would work in businesses
- How the self-employed, stakeholders, agents and professional bodies would respond to the suggestions
- Acquiring digital tools
- Digital record keeping
- Finalising the income tax position at the end of each year
- Who would be exempt from the new procedures
Results of the Consultations
In response to those invited to look at the consultations, there were concerns raised from all parties involved. The main concern was the pace of change and that there could be an issue with late submissions and failure to keep up with the digital age. Other problems included:
- Full access to the tax accounts
- Data security
- Ability to keep up with the changes
The government responded to all concerns by allowing businesses to still use spreadsheets for record keeping, minimising the data needed to be submitted to three lines and giving out free software to those businesses with straight forward accounting practices.
So, What Else Is There to Worry About It?
“The Chancellor has pledged that small businesses and landlords who come under the VAT threshold will have an extra year to prepare for MTD”, Accountancy Age.
While the government has set out to assist with taxing and responding to deadlines easier, there are also areas that can cause great stress and confusion which will only ever effect the tax payer, not the tax man.
One of the first issues to look out for will be those working in the finance function of a small business. If you know yourself how difficult it can be to withdraw information from a business such as invoicing and expenses, you will soon find it even harder to grab that information at least 4 times in one year.
Another will be the variations of results and reports over the year in the quarterly inserts and how you as a business, with Coleman and Co’s assistance, can keep accuracy a priority. As well as the investment into digital software, changes in the thresholds and updates to current accounting, you will need to be prepared imminently.
Get in Touch
Now that the government has finished their consultations, we all need to look forward to what is to come. Whatever the challenges may be, the government is nothing but committed to decreasing the hassle that all taxpayers have when it comes to accounting and the digital age.
To get effective taxation services you can trust, call Coleman and Co today on 028 9266 3599. Make the sensible decision to prepare your business now for the inevitable digital future we will all be operating in.
Coleman and Co provides the full digital accounting services your business needs in both taxing, corporate accounting, healthcare and all other industries with small to medium businesses.