The way you interact with the tax system is changing. From 2018 it will become increasingly digital and most businesses, the self-employed and landlords will need to use software or apps to keep their business records, and to update HMRC quarterly.

At the March 2015 Budget, the government set out the vision for a transformed tax system and the end of the tax return. In December 2015 the government launched the Making Tax Digital (MTD) Roadmap which sets out the bold vision for how this would be achieved, making HM Revenue and Customs (HMRC) into one of the most digitally-advanced tax administrations in the world by 2020.From April 2016, all of the UK’s five million small businesses have had access to their own digital account. By 2020, most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account. These changes will be introduced for some businesses from April 2018, and will be phased-in by 2020, giving businesses time to adapt. The Association of Taxation Technicians (ATT) has called on the government to take primary responsibility for assisting businesses to meet their new obligations under HMRC’s Making Tax Digital (MTD) programme.The appeal is made in ATT’s response to the HMRC consultation ‘Bringing business tax into the digital age’.

In its response, the ATT emphasises that if digital record keeping and quarterly profit reporting are made mandatory from April 2018 as HMRC proposes, there will be many businesses without any significant experience of keeping digital data secure that will be forced down an unfamiliar path, making them vulnerable to cyber crime, as well as being hit with new costs. Salford Chartered Accountants share the sentiments with ATT that forcing people down the digital route when they are unprepared for it could be putting them at the highest risk of being targeted by cyber crime and fraud. As pointed out by Yvette Nunn, co-chair of ATT’s Technical Steering Group, “if HMRC is taking away the element of choice from a taxpayer over how they keep their business records and whether they engage digitally with HMRC, it needs to take the primary responsibility for educating taxpayers on cyber security.”

The consultation period ended on 7 November 2016. Salford Chartered Accountants will keep you updated about any latest changes following the consultation. We understand that small businesses and taxpayers need varying levels of support to bring business tax into the digital age. For those who have difficulty going online or who need extra support, help will be available through our dedicated team. Please do not hesitate to contact us should you require any professional advice and support.

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