If you like doing your annual tax return, you’ll love Making Tax Digital – the new initiative from the HMRC.
Networkers learned about the initiative from Adrian King of Marlborough accountancy firm Bew & Co at Wednesday’s meeting of Marlborough Chamber of Commerce.
“Making tax digital is HMRC’s new plan,” said Adrian. “They’re going to abolish the tax return. You’ve got to do five tax returns now - four quarterly returns and a summary at the end of the tax year.”
The initiative effects everyone who files their own tax return, including the self employed and landlords with an income from property rental of more than £10,000 PA.
Making Tax Digital is due to be implemented in April 2018, although people earning less than the VAT threshold of £83,000 have a stay of execution until 2019.
Adrian said HMRC was working with software companies, and Making Tax Digital should integrate with anyone using popular online services by Zero, Quickbooks and Sage. HMRC is also likely to release its own free version, so as not to force sole traders and small businesses into buying software.
“But HMRC is not sure what it wants, so it’s all a bit up in the air,” he said. “And all the best minds are working on Brexit – so that won’t help.”
There were plenty of accountants in the room, and none of them was looking forward to the implementation of quarterly returns.
Meanwhile, as the Government was in the middle of its U-turn manoeuvre over increases in National Insurance, sole traders in the room were warned: “The self employed will bear the brunt of this new legislation.