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Making Tax Digital

Whether it be online shopping, gaming, advertising or socialising everything we now do is made “simpler” by the digital world and even HMRC are on board, with their plans to make tax digital.

By 2020 HMRC plan to move to a full digital tax system, which they tell us will make keeping up to date with our tax affairs “simpler” too.

So, what exactly are these changes?

  • In March 2015 the Chancellor set out his plan for the following five years by the end of which the Self-Assessment tax return will be no more.
  • During 2016 every tax payer will be issued with their very own digital tax account.
  • From 2018 most businesses including the self-employed and landlords will need to start updating HMRC quarterly for income tax and National Insurance and digital tax accounts will start to be pre-populated with other information which HMRC will receive directly from third parties, for example bank interest.
  • From April 2019 Capital Gains Tax will be due to be paid within 30 days of the disposal of a residential property, where not covered by Principal Private Residence Relief.
  • By 2020 companies will need to update HMRC quarterly for Corporation Tax and the full range of HMRC services should be made available through digital tax accounts.

Whilst HMRC are claiming that these changes will make life simpler there has been a lot of criticism as to the amount of additional costs they will create, particularly for small businesses with the need to update software and worry about reporting not once but four times a year.

However, at Rawlinsons we want to help our clients to manage these changes and we are already telling them what to expect.

In addition we have recently launched Rawlinsons Connect; an online accounting service which embraces modern technology to help deliver expert business support.

The benefits of online accounting include:

  • 24/7 access to up to date financial information and reports from any device with an internet connection even a smartphone or tablet.
  • Up to date information to help us and our clients manage their businesses better.
  •  Automatic processing with bank information feeding directly into the accounting software leading to lower costs and greater efficiencies.
  •  Apps available to make record keeping simpler, for example photos of invoices which can be imported into the accounting software.
  •  Intuitive software which recognises transactions and suggests appropriate entries to save manual input.

With Rawlinsons Connect, we can deliver an even more valuable service to our clients as we can monitor their records and give them pointers throughout the year. It will also mean that clients who are using this software will find it easier to deal with the increase of deadlines created as a result of HMRC’s digital tax plans.

To find out more about Rawlinsons Connect please click here.