The way in which HMRC checks tax records and what your business pays is changing, and it for many of us, it changes from next year. The new tax year has come into play, and while many of you who are fiscally-minded will already be collating records to build your tax returns for 2016/17, it’s worth bearing in mind that you may need to change the way you keep records in line with new measures being brought in by HMRC. The department has advised that it intends to help businesses get their tax ‘right’ – and that £8 billion a year, roughly, is being lost due to errors made during return calculations. Therefore, as accountants in Wembley and elsewhere have been made aware, HMRC is starting to roll out a scheme to ensure that financial records are kept digitally as opposed to physically.
This means that, for certain businesses, you will need to start keeping digital records only of the income you receive and the expenses that you make which are eligible for inclusion on your tax returns. HMRC intends to receive digital summaries via a dedicated program or application so that they may process and analyse returns more closely than they have ever been able to – it has previously been commonplace for the department to contact small business owners regarding their record-keeping on what is believed to be a fairly random basis. But when will you be affected?
If you are running a business that earns enough to be considered over the VAT threshold, you’ll need to start keeping digital records from April 2018 – while smaller businesses and self employed people who earn below this threshold won’t need to worry until April 2019 at the earliest. This means that there is at least time for you to start thinking about how to record your income digitally – but if you are in need of accountants in Wembley who can help, Finsol will be more than happy to show you the way forward.