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Technical

How digital tax collection could affect businesses Logo cgma

  Peter Bartram |   Free |   Jan 2018 |   FM magazine

In a recent finance bill the UK Treasury is proposing that millions of small firms keep electronic accounting records and submit digital tax returns. The “Making Tax Digital” (MTG) project is likely to have a huge impact on both business operations and the collection of tax. The article looks at possible changes and the benefits including SMEs having a much better picture of their financial affairs than currently.

Topics covered:
  • Management accounting: Technical: Tax strategy, planning & compliance: Tax return preparation & review, Advanced

2 Comments/Reflections

Bipin Hathi

Bipin Hathi Jul 2018

I have had a lot of involvement with this in my current role and its clear to see that many other countries are a lot further ahead than the UK on making tax digital . Countries like Spain and Hungary are almost at a real time impact like the Brazil model. The UK are taking small steps to start with and this may be sensible considering the complications and teething problems that took place in other countries. HMRC are also running a pilot scheme for VAT prior to launch.
Justin Meyn

Justin Meyn Jun 2018

In the UK about 65% of small business do not prepare digital tax returns since they do not use accounting software.

It costs about UKP2,000 to convert to a software based digital system.

When required to file digital tax returns tax accountants  and accounting software professionals will be required to ensure the smooth transfer to digital.

Management accountants should ensure that there is minimum disruption to operations and keep conversion costs down and try to ensure that the small business gets any benefits/efficiencies arising from digitization.

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