In the 2015 Budget statement George Osbourne announced the introduction of digital tax accounts. The idea behind this is that taxpayers have instant digital access to their tax affairs.
As part of this ‘Making Tax Digital’ the proposal is to introduce measures for self employed individuals and landlords to report their profits to HM Revenue and Customs on a quarterly basis. As a result of reporting their profit four times a year businesses will pay their taxes during the tax year in which they earned their profit, rather than months later.
HM Revenue and Customs are expecting the self employed to be using the new system in ther first accounting period commencing after 6th April 2018.
This is a big overhaul of the tax reporting system, and will mean a difference in the way businesses complete their record keeping. If businesses want their accountants to submit their figures each quarter then gone will be the days of a bag full of receipts arriving once a year. Just a smaller bag four times a year!
We have no details at present, as to exactly what will need to be submitted to HMRC. There will be a voluntary pilot before the phased introduction in 2018. Watch this space!!
If you have any accountancy or tax queries, please contact Alison at Mark Stanley Accountants on 01207 582528 or