Making Tax Digital

HMRC have recently issued 6 consultation documents outlining their proposals for a fundamental change to way they want individuals and business to submit their tax return information. If implemented as planned this will be the biggest change to the tax system since the introduction of Self-Assessment 20 years ago.

Quarterly basis

The proposals are to move to a more electronic based system where as much information as possible is automatically gathered directly from third parties. The taxpayer will then only be required to update information which cannot be obtained automatically from elsewhere.   However, these updates will have to be made on a quarterly basis instead of the current system of providing information after the year end on the annual tax return.

By embracing the technology now available, HMRC hope to improve the tax system by:

  • reducing the costs of assessing and collecting tax
  • cutting out duplication of work for the taxpayer by avoiding the need to provide information already held by HMRC
  • reducing the time delay between the receipt of income and the payment of tax

HMRC are eager to point out the benefits of the new system to the taxpayer, but if the proposals are introduced as planned the reality will be that many people will pay tax much earlier than they do now and their compliance burden will increase.

What do you think?

We will be responding to HMRC’s consultation and making representations on our clients behalf and invite you to let us have your views.

See our summaries of each of the consultations:

Please email us on MTD@goodmanjones.com with your views.

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Richard Verge - Tax Director

E: rverge@goodmanjones.com

T: +44 (0)20 7874 8856

View Richard's Linkedin profile

Richard is a personal tax expert and is able to advise high net worth individuals on either immediate tax concerns or a long term plan to ensure that their affairs are structured to take advantage of the tax reliefs available.

His experience from working with HMRC ensures that he is more than adept at understanding the view from the other side, to the benefit of his clients. Richard advises entrepreneurs, owners of family businesses and partners in professional practices and provides advice on planning from both a personal and worklife perspective.

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