HMRC Digital Tax System: How Small Business Accountant Will Help You.
- HMRC is changing the way that you report your business profits. Tax Digital rule is coming soon.
- For the self-employed and for property landlords the cash reporting rules changed from April 2017
- VAT registered traders will have to report to HMRC under a new Making Tax Digital reporting sequence from April 2019
- Self-assessment tax return is being replaced by five new reporting obligations made during and after the tax year from April 2020.
- Your first tax return under the new system is due in the fourth month of your accounting period, you will then have to file with HMRC every three months.
- Taxpayers will need to learn how to use a spreadsheet or some type of accounting software or App.
- They will need a reliable internet connection and a facility to store your electronic data.
- You can delegate all your bookkeeping and online filing to us, Small Business Accountant, if you feel you cannot cope with this new system
- If you find any difficulties please call us Small Business Accountant on 02070784371. One of our accountants will help you.
There would be five tax returns per year. Don’t worry, Small Business Accountant With You.
The first tax year to be affected in 2020/21. This runs from 6 April 2020 to 5 April 2021.
Assuming your tax year and accounting year is same.
- The first report will be due in June/July 2020.
- The second report will be due in Sept/Oct 2020
- The third report will be due on Dec 2019/Jan 2021
- Your Self Assessment tax return for 2019/20 will also be due by 31 January 2021.
- The fourth report will be due in March/April 2021
- Fifth and final year-end report deadline: probably January 2022 in the first year.
Changed Tax Digital from April 2017
- The cash basis will be the default method for unincorporated businesses.
- The accruals basis will only be used if:
- Receipts are over £150,000,
- You elect to use it instead, or
- You are a company, an LLP, a trust or a partnership with corporate members.
Tax Digital Tax payments
- You will be allowed to voluntarily pay your taxes as you go: the detail is still being decided.
- Eventually, it is likely that you will be required to make four payments per year on account of tax.
Tax Digital Penalties
- There will be no late filing penalties for at least a year while the new system beds in. After that, you will suffer penalties if you file your returns late.
- Penalties already apply for errors in returns or documents.
- Late payment interest already applies.