Making Tax Digital
Everything You Need to Know
Making Tax Digital is a government initiative to create a digital tax system. It will affect all self-employed individuals.
HMRC’s goal is to modernise the tax system, making it more efficient, effective and easier for customers to comply. Making Tax Digital aims to ‘make it easier for individuals and businesses to get their tax right and keep on top of other affairs – meaning the end of the tax return for millions.’
The main talking point about Making Tax Digital which is causing a lot of controversy and worry amongst taxpayers, is the new quarterly filing (and potentially payment) obligations for businesses and landlords. This will affect all self-employed individuals who submit a tax return.
At Boom! Accounts, we’re digital accountants for a digital age. By using the latest 1tap tax technology all of our clients will be fully compliant with Making Tax digital once it is introduced.
The Four Foundations of Making Tax Digital
Each individual and business will have access to their own personalised digital tax account. This means that they can see the information that HMRC holds and check that their details are correct and complete. Using this information, HMRC can provide a service that is tailored to each customer’s individual circumstances.
The Making Tax Digital initiative allows HMRC to collect and process information which affects tax as close to real time as possible. This helps to stop tax due or repayments owed from building up as well as to prevent errors.
By 2020, customers will be able to see a comprehensive financial picture of their liabilities and entitlements in their digital account.
Digital record keeping software linked directly to HMRC systems will allow customers to send and receive information directly from their software. Customers’ personalised digital accounts provide prompts, advice and support through secure messaging and webchat.