Annual reporting of taxes is on the way out and from April 2019 businesses will have to face filing their taxes quarterly, submitting tax information such as revenue and expenses every 3 months.
Making tax digital will be introduced in stages
- From April 2019, businesses with a turnover above the VAT threshold will have to keep digital records for VAT purposes.
- From 2020, businesses may be asked to keep digital records and update HMRC quarterly for other taxes.
Your business will be issued with a digital tax account through which your business information can be accessed and if you already submit your VAT online every quarter you will be familiar with the process.
Once a year chaos is replaced by quarterly bite size business snapshots
- Less Stress
Once a year chaos reigns when you cram everything you have done in the past 12 months into one incredibly stressed session at the end of your financial year. Making Tax Digital will alleviate this pressure on small business owners, simplifying and destressing the whole process.
- Less paperwork
Instead of having to provide a whole year of revenue and expenses in one go and be awash with paperwork, quarterly tax filing online replaces this mountain of data with quarterly bite size business data. All you have to do is check the data which will go directly to HMRC from banks, building societies and other government agencies, (you can update where needed) and file online. All money coming in and going out is recorded, simplifying the whole procedure every 3 months.
- No scary big bills
Quarterly filing of tax prevents a tax bill looming at the end of your financial year, no more worrying what you have to pay – instead you will get clear tax insights into your business’ liabilities every quarter.
- Better tax planning
Instead of getting an insight annually, you will now be able to see exactly what you owe, where and when with up to date quarterly filing. You can make key decisions and be proactive with your tax, rather than be reactive months later. Not only will it help you manage your tax situation, but strategic decisions you make as a result can help grow your business.
- Time for your business
As you no longer need to manually prepare everything for the big day at the end of the financial year, there’s more time to focus on your business. The day to day running of your business prevents you from taking a step back and actively growing your business. Making Tax Digital means you will have a lot more time to do so.
Pursglove & Brown can help you with any questions you have about tax planning – call 01244 400315 or email [email protected].