In a scheme called ‘Making Tax digital’ UK businesses will soon have to start transitioning to a digital tax system, where tax is filed quarterly using an online app.  The government plan that by 2020, all businesses and individual taxpayers will be able to register, file, pay and update their information at any time, day or night, and at any point in the year. This means for the vast majority, there will be no need to fill in an annual tax return.

While it’s great news you will no longer have to wait until the end of the tax year to find out how much you owe, it also entails new responsibilities that you should be made aware of.

Also, to avoid any confusion, note that what we are talking about here is not the same as lodging a return online, which most UK taxpayers have already done for some years.

Making tax digital has three important distinctions:

1. Bank transactions and other financial information will flow automatically into your digital tax account, whether or not you declare that income or those expenses.
2. Submissions will need to be made to HMRC at least once per quarter.
3. Submissions will need to be filed using some form of software. There will be an app set up by HMRC, or you can use an independent accounting software package.

Find more information on making tax Digital on the government Website, using the link below:

https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital

If your business does not already make use of an online accounting solution like Quickbooks, then you should start using one as soon as possible. As a Quickbooks Pro advisor, I’m here to help.

Goodluck