HMRC's New Tax Corporation Tax System

Wednesday September 20, 2017

You've probably noticed that the taxman's had his eye set firmly on the future recently. The way the UK works is changing, with the gig economy and surging private rentals meaning more and more people filing tax returns. HMRC's idea for handling this changing world is to make sure everyone's sorting out their taxes digitally. For a lot of us - people with their own Limited Companies, for instance - this probably sounds like business as usual. Take a second look, though. Some of the changes we're seeing might affect you more than you think.

 

Here's an example. If you're used to HMRC's old, free filing system for your Company Tax Returns, you've got some adjustments to make. There's a new system in place now, and the previous version's being taken out of commission entirely. Fair enough, you think. These things get updated every so often. How different could the new system be, right? Well, there's a twist to the tale here, and it could see a lot of companies getting disqualified from using it at all.

 

The idea is to simplify, clarify and generally tidy up Company Tax return filing. The new version's got some nice features to it, like the ability to submit your accounts to Companies House easily at the same time. It's really only designed for firms with relatively simple affairs to report, though. That means there's a whole list of company types that won't be able to use it any more. You can see the full exclusion run-down here. As examples, though, you can't use the free system if your turnover's above £632,000 a year, if you're an investment company or part of a group, or if you manage commercial property. The list goes on, and you'll have to consider carefully whether you're on it.

 

If you suddenly find yourself kicked out of the system, you'll have to fall back on commercial software for your filings. It goes without saying that you'll need to prepare for this early. Don't wait until the last minute to realise that you're on the exclusion list. The HMRC website has some suggestions about which systems to go with here, but hunt around a bit before you commit yourself. Not every option will have the same features, so it's worth finding one that's a good fit for your business.

 

Of course, if you're part of the RIFT Accounting family, then you don't need to worry about any of this. We'll take care of your Company Tax Returns as part of your ongoing service. If you don't already have RIFT on your team, then get in touch to hear more about how we can protect your business and help it grow. In the meantime, remember to check back here soon for more Voices from the RIFT...

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