HMRC are following other government departments and services by going digital. Few are surprised by the virtual leap, but the practicalities have left some businesses and self-employed individuals with questions. As we reach the tax return deadline, many resident entrepreneurs at Titanic Suites Belfast have been discussing the inevitable tax changes.
Thankfully our team has decided to help out by addressing some of the common questions surrounding MTD (Making Tax Digital).
What is MTD (Making Tax Digital) and why is it being introduced?
Initially announced in 2015, Making Tax Digital aims to move HMRC's tax return services online by 2020. It has hit the headlines of late, because we are approaching the next stage of the changes in April 2019. From the beginning of the new tax year, businesses will be asked to keep digital records of their VAT and for records to be submitted electronically.
The aim is to improve tax services, save money for HMRC and create a more accessible and streamlined service. Once the service has been completely rolled out, it will replace the UK's self-assessment system.
Who will be affected by MTD?
Eventually, the changes will affect individuals and businesses alike. Individuals, trustees and executors will need to declare their property and trading income on a quarterly basis. The next phase of changes, in April 2019, will impact businesses, self-employed workers and landlords. Next year, in April 2020, MTD will be extended to include corporations. Meanwhile, charities have been given an extension on the April 2019 deadline.
For a timeline on how MTD will come into effect for corporations, individuals and partnerships, click here.
How will Making Tax Digital affect me?
Imagine then that you are a Belfast-based consultant, marketer or designer. From April 2019, you will need to keep digital records of income. Files should be stored as digital images of a paper record or entries into accounting software. Some people have begun making the changes already using software like Xero and Quickbooks. The programs and their accompanying apps can help people record their expenditure on the move.
It is worth remembering that the digital system will not nullify the use of receipts and record-keeping. Instead, the main shift is in how the information is logged and fed to HMRC.
The incoming changes will affect many; however, the methods of storage will be new to few. The shift to a digital space seems like a natural progression, even for a slow-moving body like the HMRC, but could it apply to your broader business?
At Titanic suites, we can help you progress your business into a digital space. Our Virtual Offices allow you to move your business to our address, literally. We offer 3 virtual office packages, affording you a Belfast city centre address and mail forwarding. There is even monthly meeting space available for those who opt for the Platinum Package. Moving your business from a domestic or shared address to a virtual office affords you the prestige of a city centre address at a nominal monthly fee. We also offer bespoke virtual office packages adjustable to your business needs, including call handling services or additional meeting room hours.
Digital in a day
While MTD has been in the making for three years and will be rolled out over an additional 18 months, we offer a 24-hour turnaround. Speak to one of our team at Titanic Suites today, and we could have your new address and office-ready tomorrow.
Keep reading: If you're currently working from home, why not read our top tips for improving your productivity in your domestic office.