Making Tax Digital is HMRC’s planned changes to the requirements for submission of tax returns and accounts. In a nutshell, the programme increases the frequency of accounts submission (from annually to quarterly) and online tax accounts will become compulsory.
Making Tax Digital is huge – the biggest change to tax since the introduction of self assessment. (Read our ‘What is Making Tax Digital?’ blog for more details.) It has understandably caused huge shockwaves amongst business owners and the self employed, many of whom need to change from their current systems.
A phased implementation of Making Tax Digital was planned from April 2018. Those affected were: self employed, partnerships and landlords with turnover above the annual VAT threshold of £85,000.
Big Making Tax Digital News!
HMRC has announced a revised timescale for Making Tax Digital, explaining that: “There is widespread agreement that Making Tax Digital for Business is the right approach for the future. However a number of concerns about the pace and scale of change have been raised. As a result the government has announced that the roll out for Making Tax Digital for Business has been amended to ensure businesses have plenty of time to adapt to the changes.”
The website goes to state: “Businesses will not now be mandated to use the Making Tax Digital for Business system until April 2019 and then only to meet their VAT obligations. This will apply to businesses who have a turnover above the VAT threshold – the smallest businesses will not be required to use the system, although they can choose to do so voluntarily.”
HMRC adds: “The government remains committed to ensuring we can deliver a modern digital tax system for all businesses and their agents, supporting them to get their tax right and reducing the amount of tax lost through avoidable error.”
Revised Making Tax Digital Timescale
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
Making Tax Digital will be available on a voluntary basis for the smallest businesses and other taxes.
Do You Have Any Making Tax Digital Queries?
At Spicer & Co Chartered Accountants we offer a wide range of tax services and are supporting our clients to ensure that they meet their Making Tax Digital obligations. Our friendly team is happy answer any questions about Making Tax Digital – and to put the kettle on! Let’s talk.