21 September 2016
Hair and beauty salons and barber shops are being urged to go online to find out more about government reforms to the UK tax system.
The government’s plans, branded ‘Making tax digital’, will mean that by 2020 all businesses will be expected to update and pay their corporation tax and VAT online, doing away with the need for a yearly paper tax return.
The government is arguing this change will make life easier for small businesses by helping business owners to stay on top of their tax affairs, so they are less likely to be caught out by unexpected tax bills. It is also emphasising the change will not mean businesses being forced to submit or pay four tax returns a year.
However, there are concerns about whether, in reality, it will result in increased administration for small businesses, and how businesses that are not online will be adequately supported.
The first steps of the change are set to take place from next April, when businesses will be able voluntarily to set up a digital HM Revenue & Customs account, through which they will be able to submit returns digitally. The first compulsory changes will start from summer 2018 onwards.
HMRC has put together a series of videos and webinars explaining the changes and how they will work in practice and also holding a series of public consultations which will run until November.
NHBF chief executive Hilary Hall said:
“From what we know so far, these changes should be seen by salons as an opportunity not a threat. Although it will be a while before the changes come in, it makes sense for hair and beauty salons and barber shops to be engaging with these changes.
“The NHBF will, of course, monitor the reforms carefully to ensure there are no onerous ‘back door’ changes introduced, such as quarterly digital tax returns, even though the government has been very clear this is not part of its agenda,” she added.