IRISLogo_RGB

Digital Transformation Hub

The primary online resource for accountants seeking to understand how to benefit from the digital transformation.

BOOK A DEMO

Time to embrace the
digital change

Despite the delay of HMRC’s ‘Making Tax Digital’ initiative, practices should use this time to get ready rather than wait and risk falling behind. Practices that are already adopting digital solutions are benefiting from greater efficiency and collaboration with their clients.

Our Digital Transformation Hub features an array of tools, guides, videos, webinars and upcoming events created to help you on your digital journey, ensuring a smooth and profitable transition.


BOOK A DEMO

Start your Digital Journey today

BOOK A DEMO

FAQs

What is Making Tax Digital?

Making Tax Digital (MTD) is a government (HMRC) objective to transform the tax system and end the tax return.

The aim of the initiative is to make tax administration more effective, more efficient and easier for taxpayers, through the implementation of a fully digital tax system.

The initial aim was that by 2020, most businesses, including companies, partnerships and individual taxpayers who are self-employed and those letting out property, will be required to keep track of their tax affairs digitally and update HMRC every quarter. The dates for implementation have been pushed back, but the objective still remains the same.

How will an individual’s quarterly submission work for clients running their own companies and getting a salary and/or dividend calculated at the company year-end?

The process for companies has not yet been decided. HMRC will carry out a consultation process for companies, the same as they have done for other trades and this will determine how these situations will be handled.

From the individual’s perspective, it is only their trade and land & property income that needs to be filed quarterly, all other income can be submitted after the end of the tax year.

Will agents have to be approved for MTD and what is the subscription process?

The MTD process for agents is still being refined by HMRC. What we know at the moment is that agents will be required to register for Agents Services to allow them to act on behalf of their clients under MTD. To register for this they will need to request a new “clean” set of user credentials from the government gateway and carry out a mapping process in order for any existing 64-8 relationships to be carried over to these new set of credentials.

We will be making guidance available as soon as we have the full end to end process from HMRC.

Will completion of a Self-Assessment Tax Return continue for clients not covered by MTD quarterly filing , for example, for high wealth individuals with investment income and capital gains ?

Yes, that is correct, self-assessment returns will continue for those that MTD does not apply to. MTD quarterly submissions only apply to trading and Land & Property income. HMRC’s plans show that this will be expanded to cover VAT reporting and Corporations, but they are yet to consult on MTD for individuals.

What are the timescales for introducing MTD?

April 2017 – public beta opens for individuals involved in a single trade and individuals with land and property income

April 2019 – VAT Reporting will continue as it currently is with quarterly submissions, but the submission process will go via the new MTD API route rather than a Return form

April 2020 and beyond – Individuals with trading income, individuals with land and property income, partnerships and corporations will all join the journey from April 2020 onwards