Shift to digital tax reporting will require firms to invest in accounting software, say chartered accountants
More than 50 million individuals and small businesses will have access to a digital tax account by 2020 – removing the need to complete an annual tax return.
But businesses will need to submit their tax and financial information quarterly using software that’s compatible with HMRC’s systems, says Condies.
In a letter to financial secretary to the Treasury David Gauke, Andrew Tyrie, chairman of the Treasury Select Committee, said that submitting records in a “prescribed digital format” would bring a financial burden to small firms that currently don’t have accounting software or use computers.
In his reply David Gauke said: “HMRC will ensure that compatible software products are available to suit the budgets and needs of all businesses, including some free products for those small businesses with the simplest affairs.”
HMRC aims for all taxpayers to submit their taxes and manage their digital account as part of their day-to-day routine.
Taxpayers can access their accounts at any time during the year and can use them to do the following:
check income tax and tax code
update company details
track/submit forms online
check/manage benefits affecting tax
Condies can advise you on transitioning to a digital account.