Making tax digital – It would be easy to read the government’s manifesto about the future of tax administration “Making Tax Digital” as merely a vague policy document. While it’s just an outline it spells out changes that will have serious consequences for many businesses.
Who will it affect? – Unincorporated businesses with income of £10,000 per year or more, which don’t currently use software to keep financial records, will be required to do so. It seems that companies will have to use digital record keeping no matter what the level of their income. The new regime will include landlords who receive rents etc of more than £10,000 per year.
Which software? – The good news, if you can call it that, is that the government will provide free apps to help businesses. However, reading between the lines these won’t be sufficiently comprehensive for some businesses and so they may have to purchase commercial software. This can be relatively cheap for a small business, but using software isn’t as simple as keeping manual records. Most require a working knowledge of double-entry accounting.
When will it happen? – Although the deadline given is “by 2020” the document also says that some businesses will need to comply with digital record keeping by April 2018. It doesn’t give any clues as to which businesses the earlier date applies to.
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