Preparing for the digital tax system

Answer:

During the 2015 budget, the government announced its plans for a fully digital tax system. In providing this system they hope to reduce time delays, remove the need for taxpayers to inform HMRC of information that they already have and provide digital access to accounts for taxpayers.

This really is just the government and HMRC keeping up with the ever increasing use of technology available to speed up and simplify what we do. Most are using technology at an exorbitant level already without even thinking about it with our banking, paying bills, shopping, running our businesses and making appointments being just a few examples of everyday use.

With a long consultation process, there are still some unknowns but it looks like 2020 is a date that HMRC have in mind for this to be in full working order, which may seem some way away but in reality it will arrive sooner than you think.

In terms of getting ready for making tax digital, the best advice that can be given now is to ensure that you are keeping accurate accounting and tax records and even to look at making the step into the digital accounting and taxation world early by researching some of the software that is already available.

For example, Sage One is cloud based software that can enable businesses to embrace technology to help keep your accounting and taxation matters in good order. There are functions for invoicing, debtor and creditor control and downloading bank transactions effortlessly all within one system.

Once using a system such as this, you will find the next step to making tax digital far less daunting and it’s likely that you will see other business benefits too.

If you would like to discuss your circumstances in greater detail, Ashdown Hurrey can advise on this matter in addition to other tax, accountancy and business matters. Contact Martin Copland on 01424 720222 or email him at [email protected].

The self-assessment filing deadline is fast approaching. If you haven’t filed your self-assessment tax return yet and would like a free consultation to find out how we can assist, please get in touch.