Introducing Online Personal Tax Accounts

Last year the Chancellor announced the introduction of digital personal tax accounts., which will eventually replace the need to submit annual tax returns.

All personal taxpayers will have personal tax accounts by next year, as will over five million small businesses. This will allow them to have immediate access to their tax accounts so they should know the latest tax position and avoid year-end surprises.

From April 2018 all businesses, including the self-employed and landlords, will have to update their tax accounts every quarter where it is their main source of income or worth more than £10,000 per annum. How this will work in practice is as yet unknown.

This may not be a problem for VAT registered business as they already submit information quarterly or those using accounting software, but for small businesses that currently only have their accounts prepared annually this will be a big change which could be more onerous and costly.

It is also likely that once HMRC have access to quarterly income information they will want to bring forward the date tax has to be paid, which will affect business cashflow.

If you are worried about the impact on your business, or would like further advice, please contact us.