Just to recap, HMRC is looking to streamline the tax system and reduce burdens for tax payers and businesses through its Making Tax Digital campaign. This campaign will affect all businesses, those self-employed and landlords as they will be expected to keep digital records and update HMRC quarterly. It may also mark the end of the tax return. To read more about HMRC’s Making Tax Digital strategy, read our article ‘Digital Reporting to be Compulsory for ALL Businesses’.
HMRC’s reform of the tax system is such a massive change that on Wednesday 15 August six consultations were released. All of these consultations will run until 7 November 2016 and focus on:
- Bringing business tax into the digital age
- Simplifying tax for unincorporated businesses
- Simplified cash basis for unincorporated property businesses
- Voluntary pay as you go
This consultation will be of interest to: all businesses, the self-employed and landlords.
- Tax administration
- Transforming the tax system through the better use of information
Edward Troup, executive chair, HMRC, said: “Making Tax Digital represents very significant change. It will bring the tax system into the 21st century and help make HMRC one of the most digitally-advanced tax administrations in the world. Going digital will abolish the annual tax return as we know it by 2020, replacing it with a personalised digital service through which taxpayers will be able to send and receive information to HMRC at the click of a button.
“There is still a lot to design and develop, and it’s important that we do this hand-in-hand with our customers and their representatives; these consultations are the next step in this process.”
Businesses, those self-employed and individuals are invited to respond to all of the consultations. For small businesses, the self-employed and smaller landlords HMRC has created an overview: ‘Making Tax Digital for Business’, which outlines the key questions and points from the six consultations relevant to these groups. From 2018, most businesses, the self-employed and landlords will need to keep records digitally and update HMRC quarterly. Therefore, this document provides an easier way for this group of people to respond.