Making Tax Digital

 

Following the announcement of a snap general election to take place on 8 June 2017, the Government dropped clauses relating to Making Tax Digital from the Finance Bill 2017 so that it could quickly receive approval from MPs before Parliament dissolved. The policy is now on hold until after the election.

While Making Tax Digital is currently on hold, the Government has said that the clauses dropped from the Finance Bill remain policy and it intends to put forward legislation at the start of the new Parliament to enact them.

We will update this page as details of any new legislation are announced after the election.

In March 2015, HM Revenue & Customs (HMRC) announced “Making Tax Digital”, a complete online overhaul of tax filing as we know it.guide-making-tax-digital

The government will invest £1.3 billion to transform HMRC into “one of the most digitally advanced tax administrations in the world”, which will signify one of the biggest changes to tax in 70 years.

All businesses, landlords and self-employed taxpayers with an annual turnover of £10,000 or more will be required to register, file, pay, and update their information online each quarter under MTD

The timetable for the phased introduction of quarterly reporting is as follows:

  • April 2018 – Businesses with profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs), with turnovers in excess of the VAT threshold (£85,000)
  • April 2019 – Businesses with profits chargeable to Income Tax and pay Class 4 NICs,  with turnovers below the VAT threshold (£85,000)
  • April 2019 – Businesses that are registered for and pay VAT
  • from April 2020 – Businesses that pay Corporation Tax (CT)

Businesses, self-employed people and landlords with annual turnovers of less than £10,000

are exempt from these requirements, as are charities, but not their trading subsidiaries.

Businesses will only have 12 months to become familiar with the changes before late submission penalties will be applied, so it is important that they seek help sooner rather than later.

How can we help?

Despite HMRC promising to make the transition as smooth as possible, this is a radical change. It is important to not get caught out of the loop when Making Tax Digital comes into force.

Luckily, our proactive approach to these announcements ensures we are prepared for the challenges ahead, and can offer you our expertise and experience with online accountancy software.

We use a number of HMRC-approved online accountancy software products so we know how to get your business off to a flying start.

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