by Dave Watkinson
Well that’s Christmas and New Year over for another 12 months. Hopefully, you have found this period fulfilling and that you are now set up to face the cold, damp and dark days that we have ahead of us before that spring sunshine arrives again.
Of course, an accountant’s New Year only arrives at the end of January when all of his client’s tax returns have been submitted. But if the taxman is to be believed all that is set to change when “Making Tax Digital” is rolled out. People in business have already had a few taster sessions of this digital “revolution”.
Payroll information is already required to be submitted monthly on-line in “Real Time”, the new workplace pensions rely heavily on electronic submission of data, and VAT returns are now exclusively electronic, as are Corporation Tax Returns and payments.
However, “Making Tax Digital” will affect everyone in the future.
For individuals the “Personal Tax Account” (“PTA”) service is currently being rolled out, and will be available to all taxpayers from April. To get one you will need to first register for a Government Gateway account. You can then create your PTA, the aim of which is to bring together all of your dealings with HMRC. So what does this do?
Currently, the service enables a taxpayer to:
– See their tax code
– Obtain a forecast of state pension entitlement
– Check the details held by HMRC regarding any benefits-in- kind received and incorporated into your tax code
– Speed up the issue of a refund if you have overpaid tax. Normally, HMRC take up to 45 days after the calculation of a refund to send out a cheque. This can be cut to 3-5 days by entering your bank details on your PTA.
However, this is only the start, and it is the aim of HMRC that the PTA will eventually replace the annual tax return, reducing under and overpayments of tax. It is also the aim to amalgamate all of the information held by HMRC in one place. This includes all of the data currently received from employers, banks, building societies, and other government departments.
As part of “Making Tax Digital” all businesses, including the self-employed and landlords earning in excess of £10,000 per annum, will be required to make returns of income to HMRC every quarter. We understand from HMRC that this requirement is not expected to place any additional burden or cost on the businesses affected, although we understand from HMRC that small businesses will be recompensed for the additional burden or cost that this requirement will entail. Make of that what you will!
WatkinsonBlack are pleased to advise on these and other matters. They have considerable experience in all areas of taxation and businesss services, including providing a very cost-effective payroll bureau service. If you want to arrange a no-obligation initial meeting on any taxation or accounting matter then please contact us. Please note that these ideas are intended to inform rather than advise and you should always obtain professional advice before taking any action.