Making Tax Digital

October 25 2017, 0 Comments

As you may have heard in the news or from your accountant, the government is introducing Making Tax Digital (MTD).

This scheme was planned to be released early 2018 and was to apply to all businesses and self employed persons. However, due to the speed it was introduced and concerns raised, it has been put back until April 2019 for further consultation and to allow businesses time to adjust.

As per the HMRC’s Overview of Making Tax Digital released 13th July 2017…

Businesses will not now be mandated to use the Making Tax Digital 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 do so voluntarily.

This change means that no business will need to provide information to HMRC under Making Tax Digital for business more regularly than they do now. VAT has been online since 2010 and over 98% of VAT registered businesses already file electronic returns.

Making Tax Digital will build on this by integrating digital record-keeping to provide a single, seamless process with quarterly updates generated and sent direct from the software the business/agent uses to keep their records.

We expect many of these businesses to take the opportunity to provide quarterly updates for other taxes too, but there will be no mandatory requirement to do so. Similarly, businesses that are not VAT registered and those below the VAT threshold who have voluntarily registered for VAT can opt to join Making Tax digital for Business, giving them the choice of whether to opt to use commercial software to keep track of their tax affairs digitally and update HMRC on a quarterly basis.”

HMRC have not finalised the specifications of MTD for software developers to write the relevant code. However, Business Accountz can already submit your VAT returns on a quarterly basis. As a company we are keeping an eye for updates released from the government and we will of course keep you informed.

For further information see the links below: