Our 5-minute read – Tax Tips – for UK doctors and dentists will help you save tax, get organised with your tax affairs and make sure you meet important deadlines with ease.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice.
The Making Tax Digital (MTD) initiative seeks to offer businesses a contemporary digital service – one that helps them get their tax right and the technology to make it a smooth process.
HMRC insists that the MTD programme will not only help businesses get their tax right the first time, but that these improvements will assist in the reduction of the £13 billion tax gap. It should also mitigate any cost of fixings issues that do arise.
Digital delay
Unfortunately, HMRC appears to be pressing pause on the rollout of the programme due to impending Brexit. More specifically, because tax collectors and customs officials will be too preoccupied with upgrading their own systems in order to handle the increased workload associated with Britain leaving the European Union.
HMRC has also indicated the priority of projects on their list are shifting – being moved up, pushed back, or abandoned altogether. This turbulent state has prompted some to speculate that MTD might not just be on the back burner, but eliminated entirely. However, the scheme potentially plays a massive role in closing the enormous tax gap, so complete cancellation doesn’t appear to be a viable long-term option.
The initial deadline for a complete changeover from traditional tax returns to digital versions was 2020, however with this postponement, that goal seems unlikely.
The plans are still soldiering on as the benefits could potentially reach five million taxpayers.
Instead of filling out blank forms, taxpayers with smaller sums to declare will simply be able to file a pre-populated “self assessment”, the ultimate goal to make the system available to all self assessment taxpayers.
“Keep calm and carry on”
To that effect, the government is moving forward with their Making Tax Digital Income Tax pilot programme.
The next phase allows anyone who is self-employed to join the pilot, letting individuals file quarterly updates of their trading revenue and expenditure totals through the new setup. Unincorporated landlords will be able to follow shortly after.
At the moment though, with limited filing solutions and VAT at the centre of attention, experts don’t expect a mad dash towards the test pilot. However, a successful test run will only serve to draw in even more self-employed businesses.
While we will have to wait for a streamlined, modern system just a bit longer, this delay enables HMRC to perfect the technology that will be used, decreasing the likelihood of technical issues when it does go wide – a win for everyone.
It’s important you stay abreast of any developments with the Making Tax Digital plan and if you have any questions about how MTD could affect you or your business, or about tax services in general, don’t hesitate to seek the advice of a financial advisor.
The experts at Dental and Medical Financial Services will offer their knowledge and experience to build you a solid bespoke tax plan designed to save you the most tax.