Making Tax Digital

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.

Worried about Making Tax Digital? Look no further than Haslers’ online services

Making Tax Digital (MTD) is already well underway – and eventually, it will fundamentally change tax as we know it.

By 2020 all tax systems in the UK will be 100 per cent digital, according to HM Revenue & Customs (HMRC) latest consultation.

For businesses with a turnover of more than £10,000 this will mean recording information on a quarterly-basis, which HMRC will then use to decide a company’s annual tax bill.

The timetable for the phased introduction of quarterly reporting is as follows:

  • April 2018 – Businesses with profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs), with turnovers in excess of the VAT threshold (£85,000)
  • April 2019 – Businesses with profits chargeable to Income Tax and pay Class 4 NICs,  with turnovers below the VAT threshold (£85,000)
  • April 2019 – Businesses that are registered for and pay VAT
  • from April 2020 – Businesses that pay Corporation Tax (CT)

Businesses, self-employed people and landlords with annual turnovers of less than £10,000

are exempt from these requirements, as are charities, but not their trading subsidiaries.

Businesses will only have 12 months to become familiar with the changes before late submission penalties will be applied, so it is important that they seek help sooner rather than later.

This will create an extra administrative burden for businesses and will require them to use HMRC-friendly software and apps in order to comply.

While some businesses will benefit from simplified accounting on a cash, rather than accruals basis, the majority of small businesses will need to keep an accurate digital record of their business activities.

Failure to get this right could lead to substantial fines under the new penalty point system to be introduced alongside these proposals.

Fortunately, our experts at Haslers are already one step ahead of the game, offering online accounting services which are not only HMRC-friendly, but are also quick and easy to set-up and use – and even allow you to take control of your finances on the move.

By signing up today, you can reap the benefits of on-the-go, online accounts – and our expert advisers will be no further than a phone call away, should you need any help.

Find out more information about Haslers’ online accounting services today.

Related articles:
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Making Tax Digital dropped from Finance Bill ahead of General Election
Almost half of SMEs think Making Tax Digital will overcomplicate tax, study reveals
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HMRC launch MTD pilot for “hundreds of thousands” of businesses
‘True costs’ of Making Tax Digital still unclear, says Treasury Committee
Fines of up to £3,000 for failure to comply with Making Tax Digital, says HMRC
One-year delay to MTD for small businesses ‘not enough’
HMRC defends Making Tax Digital timescale at House of Lords
Making Tax Digital faces fresh criticism from House of Lords
HMRC publishes long-awaited responses to Making Tax Digital consultations
Only six per cent of self-employed business owners are aware of Making Tax Digital
50-page report calls upon Government to delay Making Tax Digital
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