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See the third link, but the short answer is that businesses that keep digital tax records make fewer errors on their returns and pay more in tax. HMRC's analysi
by jdietrich 3y ago
See the third link, but the short answer is that businesses that keep digital tax records make fewer errors on their returns and pay more in tax. HMRC's analysis suggests that the transition to mandatory digital accounting will reduce underpayments by nearly £400m per year, without imposing disproportionate costs on businesses. The API functionally mandates some level of digitisation, but it's extremely flexible - small businesses can use bridging software to maintain their existing spreadsheet-based workflow, while larger businesses can integrate the API into a bespoke system. What HMRC are really trying to rule out is pen-and-paper bookkeeping.
- londons_explore 3y ago> businesses that keep digital tax records [...] pay more in tax. Conversely, businesses that only earn £50 a year probably can have their accounts done in 5 minutes on a napkin, which is why those businesses are less likely to use accounting software and pay less tax on average... Forcing them to use accounting software won't suddenly make them earn more or pay more taxes. In fact, if the effort of running a tiny business goes up too much, many of them will just shut down.
- jdietrich 3y agoBusinesses with turnover of less than £85,000 are completely exempt from filing VAT returns. Self-employed people with trading income of less than £30,000 will remain exempt from Making Tax Digital for income tax and can continue to file returns using the web form or a paper form.