ONE of the most important roles at Farnham accountancy firm Wise & Co is to help its clients prepare for changes to the way taxes are calculated, collected or reported.

At the moment, the team are watching the government’s initiative to move to a fully-digitised tax system, a move designed to make reporting more transparent and more accurate – and which the government hopes will lead to the end of the self-assessment process.

The government has currently set a date of April 2019 for Making Tax Digital. This is just over 18 months away, which is why, accountants and businesses alike, according to Wise & Co, need to be thinking about the best approach to take.

From this date, all businesses, including the self-employed, with annual income above the VAT threshold – currently £85,000 but could change in the intervening period – will need to keep digital accounting records to meet their VAT requirements.

Currently, from 2020 – an exact date is yet to be announced – all businesses with annual income over £10,000 will need to digitally record their quarterly profit and loss account for HMRC.

The government has said that each business will be given its own online tax account. This account can integrate with the business’s own accounting software so that transactions and accounts are automatically updated on a rolling basis.

Records can still be kept on spreadsheets, but all businesses will need to use some kind of online accounting software by this point. If business owners are not already using online accounting, they can make the switch at any point before the Making Tax Digital start date.

“Once you have chosen your accounting software, it is fairly straightforward to transfer your financial information and set up the reporting and analytics you need,” said a spokesperson for Wise & Co.

For more details about Making Tax Digital, call Wise & Co on 01252 711244.