making tax digital

your questions answered


When is it happening?

We aim to provide a complete service caring for your business although we would be pleased to discuss any individual aspect of your affairs to your requirements.

  • By 2018, all sole traders and partnerships must report to HMRC via an appropriate software package;
  • By 2020, HMRC will have moved to a fully digital tax system. That means businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly.



Do I have to comply?

  • Making Tax Digital will not apply to individuals in employment or pensioners, unless they have secondary incomes of more than £10,000 per year from self-employment or property;
  • Taxpayers with a business or businesses with a total income or turnover of less than £10,000 will be exempt. Those close to this threshold may get an extra year to comply;
  • Some people will not have to comply at all. HMRC says: "The small minority who genuinely cannot use digital tools will not have to do so".



How will the software work?

  • Businesses will be required to use digital tools, such as software or apps, to keep records of their income and expenditure;
  • HMRC says it will ensure that free apps and software products are available;
  • This software should highlight any errors and offer prompts when information has been overlooked;
  • Once all data has been compiled, businesses or their agents will feed it directly into HMRC via computers or smartphones;
  • Businesses will be required to update their information quarterly - this will include details of income and expenditure;
  • Allowances and reliefs, such as Annual Investment Allowance, can be notified either in-year or at the end of the year.



How can DALE help?

  • We are keeping up to date with the latest developments and working closely with our software providers to make sure we are ready to support our clients when this comes into effect



What about paying tax?

  • Businesses will be able to see, through their digital accounts, a real-time view of their tax and a calculation of the tax due;
  • Taxpayers will make a single payment that covers all of the tax that they owe - including VAT, income tax, National Insurance and Corporation Tax;
  • HMRC is also looking at a pay-as-you-go payment system that will allow businesses to make "voluntary payments" at any time;
  • This software should highlight any errors and offer prompts when information has been overlooked;