The face of tax is changing. Under the Making Tax Digital programme, the government is aiming to drag the UK’s tax system into the modern age, making it more effective, more efficient and easier to use. The full transformation is expected to happen before 2020, but there are some important deadlines for businesses before that date – one of which is coming in April 2019.
First announced in 2015, Making Tax Digital encompasses a broad range of fundamental changes to the UK tax system, taking full advantage of modern technology like the internet. As well as enabling individuals and organisations to submit their tax returns and information electronically, the new system will make it easier for them to view and manage their records. Not only is this system expected to be faster, it will reduce the chance of mistakes, which can be expensive to rectify – both for HMRC and businesses.
From this date, all businesses with annual turnover that exceeds the VAT threshold of £85,000 will be required to meet their VAT obligations through the new system. According to the government’s guidance, they will have to “keep their records digitally (for VAT purposes only)” and “provide their VAT return information to HMRC through Making Tax Digital compatible software.”
In most cases, this will mean upgrading to new accounting software, such as Pegasus Opera 3, which is fully compatible with the new system.
Although the government isn’t yet enforcing Making Tax Digital beyond VAT, it is opening up the system beyond that on a voluntary basis – and it’s anticipating a healthy level of interest from businesses, including those that aren’t mandated by the VAT obligations.
From April 2018, businesses will be able to submit income tax records digitally, as well as sending quarterly summary updates to HMRC, using compatible software or apps. Making Tax Digital will also be available for National Insurance contributions.
Key advantages, highlighted by officials, include:
As an award-winning reseller of Pegasus software, we can help you get the best deals on Opera 3. This up-to-date accounting and payroll solution is designed with SMEs in mind – and it’s fully compliant with Making Tax Digital.
For more information about Opera 3, contact TMB on 0333 900 9050 or email info@tmb.co.uk.