Digital Upgrade By HMRC Helps Those in The Construction Industry.
HMRC has made some changes to the way subcontract workers and business owners manage their taxes. They have entirely digitalised tax services, subsequently eradicating the manual tax return. The aim is to make tax filing a far more efficient and straightforward procedure. The changes have been welcomed by many, including those in the construction and engineering industry. Today, customers and suppliers are already banking, paying bills, and shopping online. So it makes sense for HMRC and businesses to bring their tax affairs in line with other technology and services.
Why Digitalise Tax Filing?
Digitisation has already brought huge benefits to construction firms, transforming operations and services in everything from design and modelling to procurement and geographic information systems. This change is part of HMRC’s plans to make Britain one of the world’s most digitally advanced tax administrations. Importantly, these changes deliver what businesses and individuals have told us they need.
Many organisations have expressed that they want the tax to be more integrated into the way they run their business, rather than something done separately months later. They want certainty over their tax bill, not having to wait until the end of the year – often longer – to find out how much they owe. We have listened and created a system that addresses all these modern business needs.
Mel Stride, Financial Secretary to the Treasury, told reporters “We’ll make it easier for businesses to get their tax right the first time – the hurdle of the annual tax return will be a thing of the past”. This initiative will allow businesses to accurately monitor their tax position throughout the year and see how much tax they owe as they earn. The objective is to help them make decisions about budgeting, investing, and growing. Unnecessary delays will be eliminated as the tax system will be operating in close to real-time, removing the risk of missed deadlines, penalties, and errors being carried forward from one year to another.
Annual Tax Return Binned
In the future, businesses will be keeping track of their tax affairs digitally, updating HMRC at least quarterly via their digital account. But this will not mean having to fill in a full tax return quarterly. Instead, updates will be generated from digital records, and in most cases, little or no further information will be required. This will make it easier for businesses to get their taxes right the first time and keep on top of their affairs – the hurdle of the annual tax return will be a thing of the past.
The Making Tax Digital for VAT pilot is now open for business – a major milestone in this transition. Construction businesses whose affairs are already up to date and straightforward can join up to use the new tools to submit their VAT returns digitally. Over the next few months, businesses will receive a letter from HMRC explaining how to subscribe to Making Tax Digital for VAT.
Making Tax Digital is part of the government’s commitment to boosting the growth of the economy. Bringing our tax system into the digital age is right for modern business, right for modern government, right for modern Britain.
Visit our resource hub for more related articles. For free advice on going digital, please contact Futurelink’s Chartered Accountants at 01923 277900 or email: FLAccountancy@futurelinkgroup.co.uk.