It may start to feel like everyone is talking about Making Tax Digital at the moment. However, it is a really important thing for all business owners to be aware of as it will affect every business owner and every business. In this blog post we thought we would talk about the four foundations of Making Tax Digital. To enable you to gain a better understanding of why it was introduced and what it will achieve.
Better Use of Information
Making Tax Digital means that organisations will be able to see the information that is held by the HMRC. These organisations will also be able to check if the details they have entered are complete, up to date and correct. HMRC will then be able to use this information to tailor the services it offers customers. This will be according to their individual circumstances.
Tax in Real Time
With Making Tax Digital, organisations will no longer have to wait until the end of the year, or longer, to find out how much tax they should pay. Instead HMRC will collect and process the information that affects tax as close to real time as possible. This will help prevent errors and stop tax due or repayments owed building up. This should make paying tax easier for business owners.
A Single Financial Account
It is planned that by 2020, HMRC customers will be able to clearly see a comprehensives financial picture in their digital account. This will be very similar to the financial picture they can see through their online banking. This should make it easier for business owners to review their business financially and make better informed financial decisions.
HMRC customers will be able to interact digitally with HMRC staff on days and times that suit them. Digital record keeping software will also be linked directly to HMRC. This will allow business owners to easily send and receive information to HMRC from their own software as and when it suits them.
If you have concerns about Making Tax Digital or would rather bury your head in the sand, then why not contact us now. We can help you understand Making Tax Digital and take away that stress and worry for you.