Making Tax Digital - A summary
On 13 July 2017, the Government announced MTD will commence in April 2019 for VAT purposes for businesses with turnover above the VAT threshold (currently £85,000) and will be delayed until at least 2020 for all other businesses.
Under the proposed timetable: • only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, and initially only for VAT purposes from 2019 • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020
This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system. As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now. All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes. HMRC has already begun piloting the Making Tax Digital services and will continue to do so, testing the system with a variety of businesses. HMRC will start to pilot
Making Tax Digital for Businesses (MTDfB) for VAT by the end of this year, starting with small-scale, private testing, followed by a wider, live pilot starting in Spring 2018. This will allow for well over a year of testing before any businesses are mandated to use the system.
Jon Shatford BookKeeping is continuing to work with present and new clients and preparing them for Making Tax Digital by encouraging the use of cloud-based accounting packages. For more information, please contact Jon on 01488 853193.