Like many things in this world, tax is now going digital. Tax going digital is a huge change for all business owners, regardless of your business size, but why exactly is it happening? Our blog explores why this is a successful change to help everyone.
SCS Financial Management specialise in tax going digital. We manage tax returns for all business whether this is digital or paper.
Factors Behind Tax Going Digital
Tax going digital is an initiative from the HMRC to bring the tax system up to date with modern technology. This brings an end to self-assessment tax returns and should make the entire process easier for all businesses and individuals. The general idea behind making tax digital is for tax administration to be more effective and efficient.
With a fully digitalised tax system for 2020, this will also make tax returns much easier for each taxpayer. Although the changes mainly apply to businesses, they also affect others such as self-employed professionals and landlords. Although the shift to digital tax may seem like a difficult and stressful change, it will be best for all individuals in the future. Doing this now will make sure you are fully prepared for when a full switch is made for every taxpayer.
April 2020 is the earliest this change will come into place. Hence, for the majority of people, you still have time before you make the digital switch.
Easier Tax Returns
Ultimately, the government want to make their job as easy as possible and digital software is a fantastic way to do this. Paperwork and self-assessment can be very time-consuming and with HM Revenue & Customs often being understaffed, it can be difficult to track all tax revenue the government should receive.
To avoid goods and lost revenue slipping through their fingers, making tax digital is the perfect solution to manage taxes quicker and allow the HMRC to collect and manage tax returns in the most efficient way possible.
Will This Help You?
In addition to helping the HMRC, this should actually be beneficial to you. You will initially have to get used to the digital change. However, from here you have a good understanding of online tax returns and the system you are using. Hence, managing your own taxes is much easier.
This will also help iron out issues with the current method of tax returns. As it is now specifically for submissions online, using a purpose-built system, fewer issues should occur. This prevents errors with your tax returns, and therefore reducing the number of fines and penalties handed out by the HMRC.
Struggling With The Switch
Although this is a priority for the HMRC, they are trying to give you enough time to adjust. It will become a necessity for every business and individual eventually. For small business owners, tax returns will be a thing of the past. Taxes are now updated regularly in digital software, allowing the HMRC to view your tax returns and ensure they are accurate quarterly.
For business owners, this will save you a significant amount of time and means you and the HRMC do not have to deal with tax all at once. By doing this as an ongoing process, there should also be a lot less stress.
If you require assistance with tax going digital, contact SCS Financial Management today. You will receive a fast response from our team and any advice regarding digital tax. Call us on 01737 373707 or fill in our contact form to make an enquiry.