BLOG

What is making tax digital?

 Edward Kirkby posted this on Feb 9th, 2017

Under Making Tax Digital, HM Revenue & Customs are seeking to create one account for each taxpayer, for all their different taxes within HMRC. You have probably noticed changes to your online account already.

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 self-employed actors who submit a tax return. There is currently a government concession for those with a turnover under £10,000 but this is being criticised within the accountancy industry and very recently by the House of Lords. A sensible option would be to align Making Tax Digital to the VAT threshold of £83,000 so it isn’t such a burden on micro business and individuals such as self-employed actors and entertainers.

There are three phases to Making Tax Digital

    • The first phase affects small unincorporated businesses and landlords.
    • The second phase is for VAT
    • The third phase will affect companies, but this won’t come into force until 2020.

Eventually, a new late filing and payment penalty system will apply to quarterly returns and annual declarations, but we envisage there being a period of grace similar to when RTI for payroll was introduced.

Although HMRC claims that the annual tax return will go, businesses will still need to prepare year end accounts to reconcile their quarterly payments and claim various reliefs and make accounting adjustments.

Self-employed individuals will be required to submit four quarterly returns and then a year end declaration will replace the tax return.

HMRC will be providing free software but it is anyone’s guess how user friendly and fit for purpose this will be.

At Actors Tax we are following the developments of making tax digital extremely closely. If it is implemented, we will do everything possible to introduce new systems to help existing and new client’s meet the new requirements with minimal disruption and hopefully without additional costs.

Please contact Edward if you would like to discuss in person making tax digital and how it will affect actors.

Recent Posts

Archives

Tags

Categories

Subscribe

Leave a Reply

Your email address will not be published.

Follow us on Twitter Actorstax Follow us on Facebook Actorstax Follow us on Linkedin Actorstax