How you can take advantage of HMRC’s Making Tax Digital

HMRC’s Making tax Digital will see the end of paper reporting and in its place herald more regular electronic reporting and a move to collect taxation earlier and more regularly.

This will require a big change in accounting methodology and systems and, also impact your cash flow negatively as you pay tax earlier.

However the flip side is that you have an opportunity to use new software solutions, including Artificial Intelligence embedded software, to improve efficiency, productivity, cash flow, reporting, control and profits.

And the UK will have a more reliable tax stream to pay for services such as hospitals, schools, judicial system, road etc.

What is Making Tax Digital?

Making Tax Digital is a programme that HMRC has embarked upon that is likely to require over time;

• All records to be maintained in electronic format
• All back up to be in digital format
• All reporting to be electronic
• More regular, possibly quarterly, reporting of profits and,
• Earlier and in-year, possibly quarterly, payment of all taxes

The programme is being applied to various taxes in the following sequence;

1. PAYE – 2011
2. VAT – April 2022
3. Income Tax, including self-employed, unincorporated businesses and landlords with turnover greater than £10,000 – April 2023
4. Corporation Tax – 2026

How Making Tax Digital can drive your business forward

At the core of the new paradigm will sit your accounting system but, imagine a system where all the invoices and expenses automatically flow in and are correctly allocated, approved, and paid electronically, all from a laptop.

Imagine a world where you can produce quotes on your tablet and send them out then, without doing anything else, watch them get signed, stored on your system, invoices dispatched and, the cash collected on time.

Imagine a life where you can manage your team and projects from your phone, approve expenses and sign documents, check up on key data and metrics and even send a birthday message and present.

Improving efficiency, reducing costs, speeding up processes and improving the clarity and usefulness of data coming to you.

One where developing and implementing your tax strategy is part of the service.

That future is available now and, facilitated by HMRC’s drive to Making Tax Digital.

The fruit of this bright new world are ready for you now – read “Our Vision for You” and “How it works?”

Contact us today for a free consultation.

Accountably yours.

Wisdom Da Costa B.Sc, FCCA, AMCT

Director

More information

However, you can still also have an input into the unfolding plans of HMRC as follows or via this link:

Call for evidence: The tax administration framework: supporting a 21st century tax system

This call for evidence welcomes views on how the tax administration framework could be reformed to support a trusted, modern tax administration system.

Published 23 March 2021 / End date 13 July 2021

Call for evidence: Timely payment

This call for evidence welcomes views on opportunities and challenges of in-year calculation and payment under Income Tax Self Assessment, and Corporation Tax for small companies.

Published 23 March 2021 / End date 13 July 2021