HM Revenue and Customs (HMRC) originally announced plans to implement the digitalisation of UK tax in 2014. As we explained back in April,
the target date for all changes to be implemented by is April 2020, with a phased approach starting in April 2018 with income tax.
The reforms are widely recognised as being ambitious and radical, and the changes will have a significant effect on both us as accountants and our clients.
Here at Lovewell Blake we are looking ahead to the future, and in one of his recent articles
, James Shipp talks about the importance of embracing technology, but not forgetting the human touch and how our latest offering, MyLB
, combines the best of both of these worlds. If you are already planning ahead and thinking about how you can digitalise your own accountancy processes ahead of the HMRC deadlines we can help you with a fully-integrated package. MyLB
is underpinned by the award-winning Xero technology and supplemented with local, face to face advice from a dedicated Lovewell Blake contact.
The consultation documents from HMRC were published on 15 August and set out the following proposals:
- From 2018 for most businesses, the self-employed and landlords it will be compulsory to use software or apps to keep business records and to update HMRC quarterly.
- An end of year declaration and tax adjustments to be made annually. The taxpayer or their agent will be required to check and confirm or correct the details online.
- Exemption for unincorporated businesses and landlords with gross income/annual turnover below £10,000.
- Deferred implementation for certain businesses and landlords with annual turnover above £10,000 but below an as yet unspecified threshold.
- Those that genuinely cannot use digital tools will be exempted entirely from the new obligations.
- Simplification, including extending the ‘cash basis’ to larger businesses and property businesses, reforming the basis period rules and reporting requirements for businesses that use GAAP accounting.
- Introduction of ‘voluntary pay as you go’ for businesses and landlords.
- Changes to reporting and filing obligations, a new regime for late submission penalties, late payment sanctions and proposals to align interest across all taxes.
- More effective use of third party information.
The closing date for responses to the consultations is 7 November. HMRC will take responses on board before the details of the actual process to be implemented are announced.
If you have any questions, please speak to your usual Lovewell Blake contact
who will be able to help.