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.
By 2020 all businesses and individuals will have access to an online digital tax account under proposals put forward under the Making Tax Digital Campaign.
This signifies a major change in the way tax is assessed and managed – requiring all businesses and individuals to use HM Revenue & Customs-friendly software in order to comply with their reporting requirements.
In the Budget, the Chancellor confirmed that Making Tax Digital will start to be implemented from April 2018, which introduces quarterly tax reporting using the following criteria:-
- Businesses, self-employed people and landlords with annual turnovers of less than £10,000 are exempt from these requirements
- Self-employed, partnerships and landlords with turnover above the annual VAT threshold of £85,000 effective from April 2018
- Self-employed, partnerships and landlords with turnover less than the annual VAT threshold of £85,000 effective from April 2019
- Companies effective from April 2020
This is the biggest change to the UK tax system since the introduction of Pay-as-you-Earn in 1944.
The changes will require ALL businesses with turnover of £10,000 or more to review their accounting systems to ensure that they are able to produce quarterly information in sufficient detail to accurately prepare a quarterly tax return, instead of their usual annual tax return.
This means that, if you have not already done so, you will need to move over to dedicated software as simply using a Microsoft Excel Spreadsheet is unlikely to be a satisfactory solution.
At Moore Thompson we are taking a proactive approach to these changes to ensure businesses are prepared for the challenges ahead, by offering our expertise and experience with online accounting software.
We use a number of HMRC-approved online accountancy software products including Sage, Xero and QuickBooks, which are quick and easy to set-up and use – allowing you to take control of your finances on the move.
The clock is ticking…
These hugely significant changes to the way you report tax will be here before you know it, so it is important to get up to speed now and make the required changes in plenty of time.
At Moore Thompson we can take all the hassle out of making these changes and ensure that your business is ready for Making Tax Digital, so that you can focus on what is important – running your business and making it successful.
To find out how we can help you with Making Tax Digital, please contact our tax team now.
To find out more about our online accountancy services, please contact us.