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Warning: HMRC are removing the self-assesment return and replacing it with a digital return.
HM Revenue & Customs (“HMRC”) is to introduce a new online tax return system. In a move, George Osborne claimed that it would herald the end of “complex, costly and time-consuming” form-filling.
In his annual Budget statement 2015, the Chancellor said HMRC would aim to give 5 million small businesses and 10 million individuals access to a single online tax account tax from 2016. (deferred until 2024).
“We will abolish the annual tax return altogether,” Osborne told the House.
“With a digital tax account, individuals and small businesses will be in complete control of their tax affairs and have confidence that they have met their obligations,” the HMRC document states.
“They won’t need to provide information that HMRC already holds, and they’ll be able to see and understand their tax liability. For those who deal with several taxes, it will be just like dealing with one — taking the cost, time and stress out of the process.”
However, on 19th December 2022, HM Revenue & Customs announced a further delay and changes:
Understanding that self-employed individuals and landlords are currently facing a challenging economic environment, and the transition to Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA) represents a significant change to taxpayers and HMRC for how self-employment and property income is reported, the Government is giving a longer period to prepare for MTD. The mandatory use of software is therefore being phased in from April 2026, rather than April 2024.
From April 2026, self-employed individuals and landlords with an income of more than £50,000 will be required to keep digital records and provide quarterly updates on their income and expenditure to HMRC through MTD-compatible software.
Those with an income of between £30,000 and £50,000 will need to do this from April 2027.” Most customers will be able to join voluntarily beforehand meaning they can eliminate common errors and save time managing their tax affairs.
The Government has also announced a review into the needs of smaller businesses, and particularly those under the £30,000 income threshold.
The review will consider how MTD for ITSA can be shaped to meet the needs of these smaller businesses and the best way for them to fulfil their Income Tax obligations. It will also inform the approach for any further rollout of MTD for ITSA after April 2027.
There is an opportunity to develop software to help these new entrants to the market simplify their tax filing obligations.
Our Goal
Our goal is to provide a SaaS Self-Assessment browser-based software solution for taxpayers to submit their tax returns digitally.
This can additionally be made available to third-party software developers as a GOV.UK gateway tool for building into their applications.
Presently there is a pilot scheme running where certain individuals and businesses can join, this will continue to be open until full mandation in April 2026.
The major difference between the current system and the MTD system is that submissions are to be carried out quarterly for income, cost and expenses as opposed to annually. Secondly, the returns are to be made for each income stream as opposed to the whole income which is the current submission, thus the new product will have more than one use for each business or individual.
The thought is that this will lead to quarterly tax payments as opposed to one tax payment 18 months after the return has been made. This will be of significant cashflow value to HMRC and the Government’s budgets.
Meet The Team
Chief Executive Officer
Paul Oldridge
Having started his own IT business in 1984, Paul has continued to build, purchase, merge and sell multiple businesses throughout the years in varied vertical market sectors, recently culminating in selling BTC Software to the Bright Software Group who are owned by HG Capital. The consideration was a double-digit EBITDA.
Whilst working for BTC Software a Tax Solution provider to accountants in practice, Paul developed a “go-to” market plan for MTD for Value Added Tax. Even against stiff competition from over 300 suppliers, BTC Software gained a strong footing in this competitive marketplace, supplying AIPs with a solution for multiple client filings plus an individual product for SMEs with one VAT registration.
The marketing spend in year 1 was covered by its revenue leaving subsequent years with a healthy gross profit. The product was built and thereafter only required support and maintenance. This was also white-labelled by one of the top 10 AIPs in the world for their own client’s use.
Chairman
Julian Green
Having experience of market research and analytics applied to the accounting software vertical, Julian has a strong understanding of the market and competitive landscape.
His current business aims to exploit the benefits of technology through artificial intelligence and machine learning in the energy sector. He has previously started a business intelligence business, grown it organically and via acquisition, listed on the London Stock Exchange secondary market AIM and oversaw the successful sale of the business to a trade buyer.
