UPDATE: Making Tax Digital

If you haven’t already heard, Making Tax Digital (MTD), a government initiative to revolutionise tax administration in the UK and bring it into the digital era, is coming. However, after HMRC’s announcement last week it’s coming far slower than originally intended.

For many individuals and businesses the original start date of 6 April 2018 has now been postponed to 2020. Whilst the general consensus was that HMRC was rushing things, the initially drafted 2017 Finance Bill included all the relevant MTD provisions to introduce this next year. However, no sooner had the Bill been published that the Prime Minister initiated the snap election which resulted in all MTD provisions being suddenly dropped from the legislation.

You might say we’ve ended up with the correct result, by a very odd route!

At least now businesses will have plenty of time to adapt to the changes.

Whilst the general consensus seems to be that digitising the tax system is the way forward, concerns were raised by key stakeholders in relation to the pace of change, forcing the government to take steps to ensure a smooth transition to a digital tax system. The revised timetable for MTD is thus now as follows:

Revised Timetable for MTD 

  • 2019/2020: all businesses can opt to trail MTD
  • 2019: Businesses with a turnover above the VAT threshold (£85,000) will be mandated into keeping digital records although this is only for VAT purposes. (Quarterly reporting for other taxes will not be required until 2020).
  • 2020: It will become compulsory for non-VAT registered unincorporated businesses and landlords to join MTD
  • 2020: Companies and Large Partnerships will be required to join MTD

Note: Businesses with a turnover bellow £10,000 will not be required to partake in MTD

 

From the above it would appear that there is no immediate urgency to adhere to MTD, however, if the government stays true to form, there will be changes and announcements along the way. You can rely on Elman Wall to continue to keep you a breast of any developments.

Please feel free to contact the Elman Wall Tax Team on 020 7600 5667 if you have any questions or need any guidance.

 

 

 

 

 

 

 

 

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