Question: I understand that there have been some changes to Making Tax Digital being implemented, which means I won’t have to start filing figures with HMRC every quarter. Is this still happening and if so, do you know when?
Without getting too political, the government found that they suddenly had quite a bit on their plate following the initial announcement of plans for a fully digitalised system in the 2015 budget; firstly a referendum on leaving the EU and then a general election. The result being that Making Tax Digital fell down the pecking order a little.
It is still intended that Making Tax Digital (MTD) will go live, but it was announced in a Treasury statement in July 2017 that the requirements have reduced slightly and the dates previously mentioned have now been put back by a year, so the revised timetable is as follows:
From 6 April 2019 businesses with a turnover above the VAT threshold (currently £85,000) will have to start filing with MTD compatible software and only for VAT purposes.
Businesses will not be asked to keep digital records or to update HMRC quarterly for other taxes until at least 2020.
Small businesses will be able to file digitally on a voluntary basis for other taxes.
In terms of getting ready for MTD, the best advice that can be given now is to ensure that you are keeping accurate accounting and tax records and even to look at making the step into the digital accounting and taxation world early by researching some of the software that is already available.
By using suitable software for your business, not only will you be compliant with the changes that are coming, but you are likely to see many other benefits within the business, such as a far better knowledge of how profitable the business is, who you owe money to and who owes you money. The most important thing with all of this is that it can pretty much be in real time, so there is no need to wait until the end of the year to find out.
To cover MTD and the use of Cloud Accounting, we will be running a number of workshops on the 9th and 16th November 2017 at the Creative Media Centre in Hastings. If you would like to book a place on one of these workshops or find out more information, please contact Jools Stebbings in our Hastings office on 01424 720222.
If you would like to discuss your circumstances in greater detail, Ashdown Hurrey can advise on this matter in addition to other tax, accountancy and business matters. Contact Martin Copland on 01424 720222 or email him at firstname.lastname@example.org.