The taxman has released a new video on its YouTube channel on their digital transformation project
IN AN effort to educate small business owners and the self-employed over its digital tax plans, HMRC has released a new video on making tax digital, going into greater detail about its mobile application.
In the video, which involves a self-employed plumber, HMRC underlines that sole traders can now manage their tax liabilities using their smartphone.
The taxman lays out how the self-employed can update their expenses and other financial information quarterly, which saves them the stress of handing in a box of receipts to their accountants at the last minute.
“His digital tax account has now been updated – he knows how much to set aside for paying his tax bill later in the year. He has no more worries about what tax he has to pay,” said HMRC in the video, previously announced that the majority of Britain’s 5.4 million small businesses already manage their tax affairs online.
HMRC plan to abolish the annual tax return by 2020, but have been met with concerns from small businesses that they will eventually have to publish quarterly tax returns online. This is a claim that Treasury financial secretary David Gauke has repeatedly refuted, having recently discussed the plans with Treasury Select Committee chair, Andrew Tyrie.
Speaking at an event in Carlisle last week, Gauke reiterated plans to transform HMRC into one of the world’s most digitally advanced tax administrations.
“This transformation does not – repeat, not – mean four tax returns a year,” explained Gauke.
“What it means is that by 2020, most businesses will be keeping track of their tax affairs digitally, updating HMRC at least quarterly via their digital tax account.
“Importantly, these quarterly updates will not involve the complexity of a full tax return, where the business, or their agent, has to gather together and manually input data onto an electronic or paper form, and then perform various calculations,” continued the financial secretary.