Latest Update on Making Tax Digital
Significant changes regarding the introduction of Making Tax Digital were announced on 13 July 2017 – which include a new timetable and exemptions for certain businesses and individuals.
Making Tax Digital’s official roll-out has now been delayed, meaning that businesses and self-employed individuals will not be expected to send any quarterly digital reports to HM Revenue & Customs until April 2019.
Furthermore, businesses with an annual turnover below the existing VAT threshold of £85,000 will currently be exempt from MTD.
The Finance Bill – which was temporarily shelved before the General Election – will be introduced “as soon as possible after the summer recess.”
We will update this page as details of any new updates relating to Making Tax Digital are announced.
This signifies a major change in the way tax is assessed and managed – and will eventually require all businesses and individuals to use HM Revenue & Customs-friendly software in order to comply with their reporting requirements.
On 13 July 2017, the Government confirmed that Making Tax Digital will now start to be implemented from April 2019 as opposed to April 2018. This introduces quarterly tax reporting using the following criteria:-
- Businesses, self-employed people and landlords with annual turnovers of less than the VAT threshold of £85,000 are exempt from these requirements
- Self-employed, partnerships and landlords with turnover above the annual VAT threshold of £85,000 will need to submit quarterly digital reports for VAT purposes only from April 2019
- Companies and individuals will later be asked to keep digital records and update HM Revenue & Customs quarterly on other tax matters from around 2020
This is the biggest change to the UK tax system since the introduction of Pay-as-you-Earn in 1944.
The changes will eventually require ALL affected businesses 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. Businesses with a turnover of £85,000 will need to do this sooner rather than later for VAT purposes.
This means that, if you have not already done so, you will need to move over to dedicated software in good time 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 QuickBooks, Xero and Sage, 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.