HMRC warns it's time to declare offshore assets
Taxpayers could face penalties if they fail to declare their income on foreign assets before Requirement to Correct legislation comes into force: https://www.gov.uk/government/news/hmrc-warns-its-time-to-declare-offshore-assets
Perfect Guide to Making Tax Digital
Making tax digital is a dawn of a new era and reflective of HMRC’s commitment to modernise the tax system by making it effective, efficient and easier to comply with. Once fully implemented, it will be one of the most advanced tax administration systems in the world. Markingan end of the era of yearly tax returns prone to avoidable errors leading to billions of pounds of revenue lost to HMRC. On the other hand, individuals and businesses will not have to wait for the whole year or longer to find out their tax liabilities. With making tax digital, clients and HMRC will have access to information and taxes in real time.
MTD contrary to general opinion will simplify the tax regime by providing all the tax information, liabilities and entitlements in one place for business and individuals.
The CharteredInstitute of taxation have given further guidance; CIOTMTD Guide
The CharteredInstitute of Accountants have provided further guidance; ICAEW MTD Guide
Aims of Making Tax Digital
As per 2014-15 figures, avoidable errors by businesses cost HMRC £ 8bn in a year of which, £ 3.5bn are lost due to errors in VAT returns. The government wants to reduce this deficit and cost to Exchequer by supporting the individuals, businesses and agents via state-of-the-art tax system ensuring unavoidable errors are a thing of the past.
MTD for individuals:
With the evolution of modern technology, young entrepreneurs strive for a simplified business process and access to information on the go. Making Tax Digital will address all these needs by bringing everyone’s personal data under one roof on any device of their choice via Personal Tax Account. Hence, there will be no reporting burden on individuals and their agents giving them a clear picture of their liabilities and individuals in real time. With real-time reporting and integration to simplified cloud accounting software, it will enable accounts and tax returns to be produced in less time. With fewer errors. Simplifying the process for HMRC, the Accountants,and the Personal taxpayer.
MTD for Businesses:
With the cloud accounting rapidly outdating the traditional accounting methods, most of the businesses have already digitised their business processes by linking the suppliers, bank,and customers via applications and cloud software. Building on real-time cloud accounting, HMRC is aiming to reduce the tax deficit significantly by working closely with all the stakeholders involved.
From April 2019, all the businesses above the VAT threshold will be mandated to keep their records digitally and provide HMRC their VAT records on a quarterly basis in the same manner.
The implementation stage has been explored among users, Accounting agents, Software houses and HMRC very extensively.Once passed the beta stages of trials, making tax digital’s scope will be expanded to encompass all the business and individuals in the U.K.
For further up to date information from HMRC please go to the following links:
Making Tax Digital for Business- Stakeholder communications pack. Published 13 July 2018.
For direct making tax digital guidance from your local tax specialists in Cardiff & Bristol please contact Total Books by going to the following contact us at the followinglink; Contact Us.