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‘Adapting to change – Digital Tax Accounts’
The document discusses transformative changes to the UK tax system, emphasizing the introduction of digital tax accounts for 50 million individuals and mandatory quarterly updates for businesses starting in 2018. It presents concerns from small businesses about the impact of new digital reporting requirements and advocates for a voluntary transition to digital practices. A survey highlighted that many businesses are unprepared for these changes, suggesting a need for better support and consultation from HMRC.
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‘Adapting to change – Digital Tax Accounts’
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- 2. Chartered Accountants Chartered TaxAdvisers Business Development Specialists
- 3. Adapting to change: DigitalTax accounts
- 5. The most significant singlechange affecting individuals and small businesses in the history of our income tax system
- 8. “During this Parliament,HMRC will make fundamental changes to the way the tax system works — transforming tax administration so it is more effective, more efficient, and easier for taxpayers.” David Gauke MP Financial Secretary to the Treasury
- 10. “Much more thansimply adding digital tools to the current system; it is about transforming the UK tax system” - David Gauke MP Financial Secretary to the Treasury
- 11. • 50 millionindividuals will have their own Digital Tax Accounts • Pre-populated by HMRC • Everything in the one place, including Child Benefits, State Pension forecasts, tax paid • All taxation will switch to online communication
- 13. • 4 quarterly“updates” will be required each year • From April 2018, all small, non-VAT registered businesses and landlords must comply with the new digital reporting rules • From 2020 this will apply to all businesses, including companies • Mandatory digital record-keeping
- 14. • Quarterly returns(?)- similar to VAT or RTI/PAYE systems • Online billing, aligning payments with profits made (Pay as you go) • Tax potentially payable monthly, quarterly or by Direct Debit • ‘Real-time’ • HMRC access to bank accounts?
- 15. ‘Single Business Service’ Don’tbelieve the Government spin
- 16. Case study: Self-employed; sole-trader Sporadicturnover Not VAT-registered No employees Poor record-keeping
- 17. Case study: Self-employed; sole-trader Largeturnover VAT-registered Has a number of employees Boxes of receipts & invoices
- 19. Case study: Director& Shareholder Salary Company dividends Bank interest Receives Child Benefits Pays personal pension contributions
- 20. Case study: Landlord 2Furnished properties £500 per month gross rents x 2 Buy-to let loans Joint title
- 21. Bookkeeping survey of500 businesses across the UK: • 25% use software currently • 25% use a paper-only system • The rest employ a mixture of both or use packages such as Excel
- 22. • ‘Quarterly taxreporting a threat to small businesses’ • ‘Small firms will struggle with new quarterly tax returns’ • ‘This should be a voluntary scheme for small businesses’ • ‘HMRC should undertake an impact assessment and consultation exercise’
- 23. ‘Should be amatter of choice and should not be made mandatory’ ‘Businesses should be able to move to digital over time’
- 24. Your call toaction: • Ditch the bad habits • Adopt good practices • Bookkeeping • Embrace software • Change now
- 25. Thank you forlistening
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- 27. @TheBusJourney #SMEJourney The BusinessJourney Thankyou for your attendance. Next event 30 August 2016