Making tax digital – too soon?
George Osborne announced the introduction of digital tax accounts in his 2015 Budget, with more information being sent online to HM Revenue and Customs (HMRC) by employers, pension funds, banks and other institutions. This information will then be used to calculate individuals’ tax liabilities which may be viewed by them online. All this sounds great in theory, but many accountants expressed concerns about the reliability of this data.
We now learn that by June 2016 every individual and 5 million small businesses will get access to their digital tax account. Over the next four years HMRC expects a full range of services to be available to taxpayers through their digital tax accounts.
The next big step will be introduction of quarterly reporting of income and expenditure by businesses and landlords from 2018 according to the government.
Again we accountants have serious concerns about the timescale and lack of consultation. HMRC say “you will not need an accountant to fill out the information on the new system”. They are expecting businesses to use new Apps on their Smart phones and Tablets to transmit their data to HMRC. Most of you, I am sure, would rather spend time running your business than filling in more forms.
Please get in touch with us on 01782 594958, to discuss the implications of this proposed change.
Key points from the budget 2016
One of the main themes of the Chancellor’s March 2016 Budget was to ensure that the next generation inherits a strong economy, is better educated, and grow up fit and healthy. His proposed “sugar tax” on the soft drinks industry will be used to fund longer school days for those that want to offer their pupils a wider range of activities, including extra sport.
He again stressed his prudence in concentrating on debt repayment and the importance of “mending the roof while the sun shines”, although he acknowledged that there were numerous factors that could impact on his “bullish” growth forecasts and promises of future budget surpluses.
There will be further changes affecting savers and he hinted that there could be yet further changes to pensions, but not for the time being.
The Budget also addressed the following key areas:
- Personal Allowances
- Income Tax Bands
- Further Changes to ISAs
- Pension Allowances Reduced
- £1,000 Savings Income Tax Free 2016/17
- New Dividend Rules Start 6 April 2016
- 32.5% Tax on Loans to Participators from 6 April 2016
- Capital Tax Rates
- Further Changes to CGT Entrepreneur’s Relief
- Lower Corporation Tax Rates
- £1,000 Tax Free for ‘Micro-Entrepreneurs’
- New Corporate Tax Loss Rules
- Interest Relief Restricted for Multi-National Companies
- SDLT Changes
- Tax Relief on Small Donations to Charity Increased to £8,000
- VAT Registration Limit £83,00
If you would like more detailed information about any of these areas, please get in touch at email@example.com or call us on 01782 594958 – we’d be happy to help!
Thursfields Chartered Accountants