New HMRC digital tax recording requirements require major changes for SCR businesses

Businesses will see a drastic change to how they record and manage their tax in an attempt by the HMRC to make the process more effective, efficient and easier for tax payers.

From 1 April 2019 around 1 million businesses registered for VAT will need to keep their tax records digitally and file returns using Making Tax Digital (MTD) compatible software.

The latest tax gap figures show that avoidable mistakes with the current HMRC tax system is costing the Exchequer over £9 billion per year. The improved accuracy that digital tax records will provide aims to reduce the amount of tax lost to avoidable errors.

Furthermore, MTD aims to make it easier for businesses to manage their tax and save time, which instead can be spent maximising business opportunities, encouraging growth and developing good financial plans within their business.

The Growth Hub is running a Masterclass offering a guide to small and medium businesses in the region about the changes being brought in by the HMRC, and to demonstrate the benefits of moving away from manual book keeping.

HMRC boasts that the new digital tax system will make managing tax:

• More effective, providing fewer opportunities for errors, miscalculations and fraudulent activity;
• More efficient as the process will be faster and more automated for businesses, accountants and HMRC, helping them save valuable time;
• Easier for taxpayers to get their tax right when record and file their tax returns online.

Key findings from the latest ‘Measuring the Tax Gap’ publication show that small businesses made up the largest proportion of unpaid tax by customer group at £13.7 billion. But thanks to The Sheffield City Region Growth Hub businesses can prepare for April 2019 early.

Delegates attending the Masterclass will fully understand how to utilise the forthcoming changes to their advantage and be compliant ready for the changes.

The Masterclass is running in February 2019, and you can book your free place here:

More information on making tax digital can be found here:
Discover more on Measuring the Tax Gap publication here: