Government to publish Making Tax Digital plans in January, 2017

What will the UK’s taxation system look like in 2017? Well, judging by the announcements coming out of Whitehall in recent weeks, the future of taxation is digital. The government has been pushing the ‘Making Tax Digital’ programme for quite some time now, and despite many expressed reservations about the policy from accountancy and industry bodies and even the Treasury Select Committee, Chancellor Philip Hammond has recently confirmed that the government intends to press ahead.

The government announced in the Autumn Statement that it will publish its response to the Making Tax Digital consultations at some point in January. Further evidence of the government’s commitment on digital was evidenced both in its announcement to invest £1 billion to upgrade and futureproof the UK’s digital infrastructure, and offering the incentive of 100 per cent business rate relief to companies who invest in fibre broadband.  

So why is the government so determined to push ahead with its digital agenda when many have expressed such deep reservations? Well, the simple answer is it believes digitalisation will simplify and improve the UK’s unnecessarily complicated tax processes. Jane Ellison MP, Financial Secretary to the Treasury, said recently:

“We are committed to a transparent and accessible tax system fit for the digital age, and Making Tax Digital is at the heart of these plans.”

“This new system will make the UK’s tax administration more efficient and straightforward, and will offer businesses greater clarity when it comes to paying their tax bills.”

“By replacing the annual tax return with simple, digital updates, businesses will be able to concentrate on putting people and profit, not paperwork, first.”

So what is HMRC’s take on the digital transformation programme? Well, HM Revenues & Customs, believes once the UK’s tax system embraces digital, the regime will become much less burdensome for small businesses and red tape will be significantly reduced.  HMRC also feels that the digital taxation programme will also offer the following additional benefits:

  • ‘Cash-basis accounting’ so that thousands more can pay the tax they owe based simply on the difference between money they have taken in and what they have paid out; so tradesmen will pay tax on cash received as opposed to invoices issued.
  • Prompts and alerts to help businesses ensure that they are paying the right amount of tax and receiving advice on tax reliefs they may otherwise be missing out.
  • Greater certainty over tax bills so businesses will not have to wait until the end of the year before discovering how much tax they actually owe.

News / Blog

13th
December

Autumn Budget 2017 – Business Tax Implications

Since the budget statement in November, a number of further details have been released. This week, we have a look…

5th
December

Review of the Budget – 2 Weeks On

It’s been two weeks since the Autumn Budget. Our initial reactions remain the same, but with more information published in…

30th
November

Cloud Accounting – Soon To Be A Necessity For All Businesses

There are a number of implications for Stockport small businesses that came out of last week’s budget. We will be…

22nd
November

Autumn Budget 2017 – Initial Reactions for Small Business

The Autumn budget is out. The Chancellor of the Exchequer, Philip Hammond MP has delivered his Autumn Budget 2017 speech…