Making Tax Digital: what small businesses and the self-employed need to know
To improve efficiency, HMRC want to go paperless. Making Tax Digital involves keeping digital records and using software to complete tax returns. Eventually, keeping paper records won’t meet the requirements of tax legislation.
Read MoreNo Brexit worries for Making Tax Digital, says HMRC
It had been suggested that the Revenue would have to delay the scheme, scheduled to launch on April 1, for more than a million VAT-registered businesses, if the UK was to crash out of the EU without a deal.
However, in a letter to the Financial Times, HMRC deputy chief executive Jim Harra, wrote, “The truth is our system is already live and by the end of February we’ll have written to every affected business encouraging them to join the thousands of others who have registered.”
Read MoreOnly 57 percent of businesses are ready for Making Tax Digital deadline
HMRC’s ambitions to turn the UK into one of the most digitally advanced tax regimes in the world have been beset with challenges as companies drag their heels in complying with the Making Tax Digital deadline.
Read MoreGovernment warned of dangers in digital tax
In a discussion paper published, the OTS suggested technology had the potential to create a tax system where taxpayers need only "press a button" to meet tax obligations.
But the paper warned with these advances come the risk taxpayers may become disengaged with their own tax affairs, leading to problems with culpability in the event of errors.
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