Making Tax DigitalJacqueline McGregor
The results of more regular reporting is likely to be more frequent payments and in fact in the most recent Budget 2016, it stated that from April 2018 small business owners and landlords will “be able to adopt pay-as-you-go tax payments”. The government has confirmed they would consult on payments of taxes though, including whether to align payment dates more closely with when profits are arising.
A timeline is available in HMRC’s ‘Making Tax digital’, but the key milestones from the document are:
- By April 2016, every individual and small business will have access to a digital tax account. The digital accounts will present individual taxpayers with a personalised picture of their tax affairs, along with prompts, advice and support through web-chat and secure messaging
- From April 2018, businesses, including everyone who is self-employed and those letting out property, will update HMRC at least quarterly where it is their main source of income (or a secondary source of income above £10,000 and their main income is from employment or a pension)
- By 2020, taxpayers will be able to see their complete financial picture in their digital account, just like they do in their online banking. And they will be able to set an over-payment of one tax against the under-payment of another: it will feel like paying a single tax.
£1.3bn of investment has been pledged, so the government is clearly serious about this initiative.