The deadline for submitting your Self-Assessment tax return is coming up quickly in just a couple of short weeks on January 31st. Surprisingly enough this isn’t everyone’s favourite time of the year. Especially after the Christmas and New Year break, many forget and end up rushing to complete it before the deadline to avoid getting hit with a penalty.

 

A new study from YouGov for 1Tap Receipts an expenses management app has found that 55% of people submitting tax returns say they dislike the progress. 45% said that the process can take Make Tax Digitalover five hours to complete it. A further 22% says they can spend ten hours or more on annual submissions.

Make Tax Digital

With the new Make Tax Digital scheme coming into place, people are going to have to change the way they do their accounts.

Small businesses and sole traders will have to keep track of their accounts and tax affairs digitally and report these quarterly to HMRC. The aim is for this to give businesses a clearer, real-time view of how much they owe as well as the status of their general financial affairs.

By 2020, the government’s plan is for everyone to be able to see a complete picture of their financial records online in the same way they can with online banking. People will also be able to pay their tax in payments spread across the year which will help to ease the financial burden that many businesses and sole traders face.

Unfortunately when questioned, 94% said that they had never heard of it. The plan is for businesses to adopt this new digital version of submitting financial information by 2020, giving businesses only a short few years to prepare for a shake up of how they usually submit their accounts.

Co-founder of 1Tap Receipts, Michael Wood said, ‘Make Tax Digital is a big, but overwhelmingly positive change as it will help self-employed people manage their finances in a much more streamlined and efficient way. In fact, many of them and their accountants are already automating various parts of the tax return process to give them a real-time view of their accounts, but without the headache of hours spent poring over a spreadsheet.’