Let's Talk About Making Tax Digital
So, let's talk about this whole 'Making Tax Digital' thing! It seems to be a hot topic of conversation.
And when I say 'hot topic' I mean very dull yet you need to know it kind of 'hot topic'.
It seems rather scary to some, but making tax digital is simply a new initiative from HMRC to ensure businesses (in the UK) are keeping digital records and are filing them every quarter.
Essentially the aim of this government strategy is to reduce admin time by turning the process into a real time submission, which means the information will come directly from accounting software, banks and employers. It may seem a little intense, but this will actually save you from having to budget for an unknown amount of tax and will prevent you from over or under paying. But due to the recent delay of making tax digital, it will not affect everyone immediately. So why was it delayed and who is affected by it?
The delay was caused due to concerns that original scheme was a little ambitious to meet the original deadline of April 2018. This feedback came from businesses, accountants, and governmental bodies alike.
If you are a business that exceeds the VAT threshold which is over £85,000 then....
You will be required to keep digital records, but it will only need to be for VAT purposes, and this requirement will only start in 2019.
If you are not a business that exceeds the VAT threshold then...
You will not be asked to keep digital records until 2020. However, small businesses will have the option to file their taxes digitally if they choose to do so.
But wait- how do you even store your taxes digitally?
Well if you are a client of Cone Accounting or are on a cloud platform such as Xero, then you are ready for the move. In fact, most of it will be done already.
We personally are big fans of making things digital, but we can understand how it can be a little overwhelming.
It is so important that you are ready and fully prepared for the change. We would suggest having a chat with your accountant to see what plans are in place to help you and your business transition easily.
As you are a Sassy Digital reader you are entitled to a free discovery call and 5% off your monthly fee if you choose us to be your accounting partner. Of course, we will help you with every step of the way as well as unlimited email and telephone support. Just reference this blog post when you get in contact!
About the Author
Ben is the Director of Cone Accounting, an alternative accountancy firm designed for creative entrepreneurs. Ben first started the company, when after a decade of experience in the industry, he decided he had more to offer. He wanted Cone to be the perfect blend of business and lifestyle and wanted to help creatives understand and access their finances more easily. By harnessing technology Cone specialises in business growth and cloud accounting.