News
Digital Tax Is Coming: What Business Owners Need To Know
25 - 07 - 2016
The way you do your
taxes is set to change. HMRC intend to have a full digital tax system in place
by 2020.
Taxpayers could be
expected to account for their income, taxes and payments quarterly. Systems are
currently being trialled and HMRC have said they are hoping the change will be
in place within the next 4 years.
The change comes as
part of the government’s objective to modernise the tax system. Individuals
will be able to update their information, register for new services and
understand what tax needs to be paid and when.
Digital accounts are
already available to some individuals, although not fully operational. To sign up you will need to create a
government gateway on https://gov.uk. The eventual change is said to be
beneficial to business owners as they will be able to pay personal taxes on
income as they occur for each quarter rather than on completion of self
assessment. This does, however, have a
cash flow implication with the initial quarter being paid 18 months
before the normal due date of 31 January following the end of the tax year.
HMRC
will use the information it already holds along with bank interest information
together with third party broker information to populate tax returns which in
turn will mean less work for the taxpayer. Those with accountants who have
third party access to HMRC accounts can be assured that their accountant can
continue to still do everything they are already doing for them online.
Any
change in regulation can be difficult to get your head around. Business owners
can receive free advice from Foremans by giving us a call on 01244 625500.

