HMRC intends that Making Tax Digital will allow taxpayers to interact digitally by 2020. Each taxpayer will be provided with a Digital Tax Account into which information will be fed by third party software e.g. employers payroll software providing details of pay and tax deducted, from banks with details interest payments and from companies paying dividends etc. All this means that the Tax Return will be replaced by the Digital Tax Account.

From April 2018 the majority of sole traders and landlords will require to keep records in a digital format and submit this online each quarter. By 2020 SME’s will be included and will encompass VAT and Corporation Tax Payments.

What does it all mean – your tax liabilities will be calculated from the information in your Digital Tax Account. This leaves open the possibility that the calculations could be incorrect without any adjustments being carried out by a professional tax advisor / accountant.

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