Tax will soon becomes digital! This is the so-called MTD (Making Tax Digital), one of the most ambitious government projects in the pipeline at the moment. HMRC is to become the world most advanced tax administration system by 2020!
What is this all about? Currently the consultation is based on below areas:
- Bringing business tax into the digital age
HMRC would ask for digital record keeping in the future, software or spreadsheet, like it or not, paper no more, but there will be financial support behind this such as certain tax relief and online training courses which will be available to all businesses.
- Simplifying tax for unincorporated businesses
Cash basis VAT accounting threshold will be changing, make it easier for more business but questions remain for fast-growing businesses. So what threshold will it be? Distinctions between capital and revenue expenditure will be more clear under the MTD so taxing will be more accurate (more online assessment tool perhaps?).
- Simplifying cash basis for unincorporated property businesses
Small or big, landlords can use cash basis VAT accounting and under MTD there won’t be any turnover limit as a threshold when they opt to cash base accounting.
- Voluntary pay as you go
A voluntary system will be made available under MTD, anyone who would like to be organised and arrange their tax payments more regular to suit their own circumstances, they will be able to do that under MTD.
- Tax administration
This will make tax penalties more transparent and how interest is calculated. Small businesses and self-employed people must take notice here!
- Transforming the tax system through the better use of information
HMRC is hoping MTD will provide businesses more up-to-date information on their tax liabilities and it could aim businesses decision-making as a result. Let’s hope this happens without any catch!
For more on MTD, watch this space! Raise you questions here below: