Businesses in Swindon should prepare now for the government’s sweeping taxation system changes which will be introduced with the Making Tax Digital programme.
Jon Lacey, accounts director with chartered Swindon firm Regulatory Accounting, said although some of the implementation plans have been put back, the sooner businesses get to grips with the new system the better.
“The changes had been going to start as early as April 2017,” he said. “Although this has now been delayed, Making Tax Digital has huge implications, with small businesses and the self-employed being the first to be affected.”
Making Tax Digital is the initiative under which HMRC plans to make fundamental changes to the way the tax system works, and by 2020 should have moved to a fully digital system.
But many business owners are unsure what MTD means to them. A recent survey found 43 per cent didn’t even know what MTD was.
Jon said the most significant change for businesses under Making Tax Digital will be the end of the annual tax return. By 2020, most businesses, the self-employed and landlords will be required to update HMRC quarterly via a digital tax accounting system, using approved software.
He said: “This change means instead of saving up all the information for the annual tax return, the information is sent through quarterly and has to be done so digitally – so no more paper tax returns, except in exceptional circumstances. Software will need to be put in place, and businesses’ accounting systems, and their accountants, geared up for the change.”
Regulatory Accounting has been proactive in anticipating MTD, and its accounting systems were set up specifically to cope with quarterly reporting.
Jon added: “We knew MTD was coming, and so we have our systems in place for all our clients, in order to meet the demands of quarterly reporting. Our mission is to make tax simple for our clients, and this is one way in which we achieve this goal.”
The new ‘real time’ tax system means business people will be able have an up-to-date view of their business tax affairs and liabilities through accessing digital accounts. Although any tax owing won’t at this stage be required to be paid quarterly, Jon anticipates this may change in the future.
He added: “We can see that happening somewhere down the line, but it’s not planned at this stage.”
For more information about Making Tax Digital and how it will affect businesses, contact Jon Lacey at Regulatory Accounting on 01793 209 160 or visit www.regaccounting.co.uk.
Pictured above: Jon Lacey accounts director at Regulatory Accounting