Agents will need to take steps to prepare both their own practices and their clients for the disruption that Making Tax Digital and digitalisation will cause to the market for accounting and tax services.
HMRC's vision to digitalise the UK tax system is well underway. The transformation will start with Making Tax Digital (MTD) for VAT from April 2019.
The first stage of HMRC's Making Tax Digital (MTD) programme focuses on VAT and imposes new requirements for digital recording keeping on VAT registered businesses and organisations from April 2019.
During the introduction of Making Tax Digital (MTD), ICAEW is sharing the latest information about the software that taxpayers and agents will need to keep digital records and to submit information to HMRC.
Making Tax Digital (MTD) will lead to very significant change for many ICAEW members in practice. MTD is a major HMRC driven change to the administration of the tax system but it should be seen in the context of the increasing digitalisation of business, including the business of providing accounting and tax services.
MTD for individuals is centred around the Personal Tax Account (PTA) which already has many of the services needed by PAYE taxpayers. HMRC continues to improve and develop the PTA.
Making Tax Digital (MTD) for income tax will not be mandated until April 2020 at the earliest and much of the detail of the requirements is still unknown. Here ICAEW's Tax Faculty outlines how it is likely to work and the progress of the pilots.
As HMRC rolls out new digital services to agents, including MTD for VAT and income tax services, access will be via a new agent services account (ASA).