This is a thought leadership article by PrimeGlobal member firm HURST which looks at expanding your digital tax strategy.

There are three elements to the government’s strategy, outlined in the July report.

Making Tax Digital

At present, making tax digital (MTD) applies to businesses with a turnover above the VAT threshold of £85,000. These businesses are required to keep digital records and to file VAT returns using online software.

Recently announced plans will see MTD extended:

  • From April 2022, the VAT filing requirements will apply regardless of turnover.
  • From April 2023, MTD will apply to all taxpayers filing self-assessment tax returns where their annual business or property income exceeds £10,000.

Once self-assessment taxpayers are included within MTD, HMRC will have access to up-to-date, real time business information which is no more than four months old. HMRC intends to expand its MTD pilot service from April 2021 to allow businesses and landlords to test the service well in advance of the requirement to join. A consultation later this year will look at how MTD is to be extended to limited companies.

Payment of Tax

Although the report makes it clear the extension of MTD to self-assessment taxpayers will not initially see any change to when tax is paid, it then considers what might happen in the longer term. Tax payments could be brought into line with the increasingly real-time nature of tax reporting, with the change making it easier for many taxpayers and businesses to manage their cash flow.

Tax Administration

Various suggestions are made under this heading. One very useful proposal is for the government to go ahead with a simplified registration process, so that a business need only register once with HMRC for all taxes.

With HMRC having had to quickly develop additional online systems and help for taxpayers during the Covid-19 pandemic, moving towards a more integrated, real time approach should make such interventions easier to manage in future. Help and support for MTD can be found on the .GOV site.

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From our headquarters in Manchester, the United Kingdom's second city, we serve a broad range of industries including Oil, Manufacturing, Service, Automotive, Aerospace, Pharmaceuticals/chemicals, Food manufacture, and Shipping & Transportation. HURST has been internationally active since the mid 90's as our client base grew to include leading entrepreneurial businesses who were looking overseas towards expansion. We believe that we are unique in our approach - project managing pan global projects and putting our own people in on the ground to best serve our clients. This approach has attracted other accountancy firms to us and we now serve a number of US-based firms who utilise our project management skills and experienced staff to manage European projects on their behalf.

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