Help – I’m a small business, what do I need to do for Digital Tax?
The recent budget announcement from Phillip Hammond on the Digital Tax strategy has meant that for many, the start date has been delayed until next April. Those in this category will have a sales turnover of up to the VAT threshold (probably 85K by 2018/19). For those who have sales exceeding the threshold, April 2018 will still mark the commencement of using the new digital tax system.
This new system has many benefits, including not having to wait until the end of the tax year to find out how much you owe; however, there will also be additional responsibilities. You will have access to a personal online account which requires manual updating, and will alert you when actions need addressing. Online support will be available in the form of webchat and messaging services.
So, how do you get ready? Firstly, talk to us as your accountant and advisor and we can guide you through the process and help you to get prepared. It is vital that at this stage you consider your infrastructure, and how it can be moved to online. If your business does not already make use of an online accounting solution, like QuickBooks, then it would make the transition much easier if you start to use one, as this will be the new route in which data will be collected and submitted to HMRC.
The new digital strategy will be implemented in stages from April 2018 to 2020, giving businesses one year to prepare to move to online accounting. Regardless of this additional time, we strongly feel the early adopters of online accounting software will be better able adapt to this new process.
HMRC will begin testing the digital reporting feature with small businesses before the end of the year, providing us with some time to help you get your systems ready, so you can spend your time managing your business rather than worrying about your tax planning and compliance.
Please get in touch for more guidance on Digital Tax.