The digital tax revolution has begun - so what are the first steps to transitioning your taxes from paper to the cloud and what points should you consider before you embark on this accountancy journey?
The government first announced its vision for modernising the tax system at the March Budget 2015.
The Making Tax Digital roadmap set out how this bold vision for the future of the tax system would be achieved by 2020.
As of April 2016, every individual and business now has access to his or her own personalised digital tax account and these are being regularly expanded and improved. In short, the new digital tax system is designed to be more effective, more efficient and easier for taxpayers. This is a much easier system, which will help people keep on top of submissions rather than having one large, arduous task.
So what are the first steps to transitioning your taxes from paper to the cloud and what points should you consider before you embark on this accountancy journey?
The Digital Tax Revolution Has Begun:
Millions of individual taxpayers are already starting to manage some aspects of their tax affairs digitally through online filing and payment in Self Assessment. 86% of Self Assessment tax returns are made online, and digital accounts for individuals were introduced last year. The future tax system for individual taxpayers will be built on the same core principles as those for businesses - a digital tax system operating in as close to real-time as possible.
But not everyone is tech savvy:
Not everyone relishes the tech savvy world and still longs for a paperback over an iPad or banking through a cashier as opposed to an app. That is where a trusted and cloud-based accountancy firm is invaluable. Transitioning through MTD without third party support can be scary and confusing. Select a knowledgeable accountant who can take ownership of the process but also explain and guide you through taking all elements of finance on-line.
Supporting You Every Step Of The Way…Not Just Annually:
For many businesses and self employed individuals, they only ever see their accountant when their tax return is due. Your accountant should check in with you regularly to update you on your business performance as well as giving advice on growth and how to achieve that.
By holding cloud-based accounts you have a real-time overview of your business, thus giving you time and information to make real changes, which can reap rewards. Number crunching accountants are a thing of the past and now offer a real insight into how your business is performing, or in some circumstances under performing. We offer digital accounting software such as Sage One, Xero, Free Agent, Quick Books and Kashflow to assist with making the transition as smooth as possible.
Better Understand The Information HMRC Holds About You:
Having accounts hosted digitally will mean that you will not have to give HMRC information that it already has, or that it is able to get from elsewhere – such as information from employers, banks, building societies and other government departments.
Digital tax accounts for all will mean that you can see the information that HMRC holds and be able to check at any time that your details are complete and correct.