Don’t make tax difficult
Making tax digital should not be making tax difficult
Brexit or no Brexit, this is going to happen. The last main update from the government was mid-2017 – so this is not going away, no matter how many other things our country’s leaders may have on their minds.
After the initial announcement, there was a consultation, this government love a good consultation, followed by a rethink.
HMRC say “We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.”
They went on to announce how and when businesses will be affected – but our advice is don’t wait too long to get your house in order. With the correct accounting and tax advice and assistance it will not be difficult to comply, but get the ball rolling now.
A new revised timetable has been announced for the introduction of what is correctly titled Making Tax Digital for Business (MTDfB).
MTD makes material changes to how taxpayers record and report income to HMRC. Unincorporated businesses, including landlords, were expected to be the first to see significant changes in the recording and submission of business transactions but the government has announced a delay to the implementation of the new rules and some exceptions for smaller businesses.
Under MTD, businesses will be required to:
- maintain their records digitally, through software or apps
- report summary information to HMRC quarterly through their ‘digital tax accounts’
- submit an ‘End of Year’ statement electronically
A new timetable is being introduced following concerns raised by the Treasury Select Committee, businesses and professional bodies about the implementation of the new rules and to hopefully ensure a smooth transition to a digital tax system.
Under the new timetable:
- only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes
- they will only need to do so from 2019
- businesses will not be asked to keep digital records or to update HMRC quarterly, for other taxes until at least 2020.
This means that businesses and landlords with a turnover below the VAT threshold will not have to move to the new digital system. At least not at the outset.
It has also been confirmed that the proposed changes to VAT reporting will come into effect from April 2019. From that date, businesses trading above the VAT threshold will have to provide their VAT information to HMRC through Making Tax Digital software. That means for example that you will probably have to move to a proper software solution, as opposed to using Excel. Although you should still be able to use Excel as long as you transmit the data on digitally.
For further advice existing clients email us at support@anytime.uk.com or call 03333 110 230
For new enquiries contact us now
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