HMRC and Quarterly Reporting
The draft rules for “Making Tax Digital” have now been published. Businesses will need to consider whether their existing procedures will be compatible with the new system, or whether changes will need to be made.
The rules apply specifically to how business owners will need to digitally file income tax and VAT records, as “Making Tax Digital” will come into effect from April 2019. From then UK businesses with an annual turnover above the VAT threshold – currently set at £85,000 – will have to keep all their records digitally, and provide VAT return information to HMRC via software that’s compatible with the HMRC online system.
The rules also stipulate that once Making Tax Digital for income tax is introduced, firms will be legally required to keep a digital record of each and every business transaction.