31/08/2017 by Pete Bird 0 Comments
Newsletter September 2017
Making Tax Digital (Update as at 14 July 2017)
The government has announced major changes to its Making Tax Digital for business (MTD) proposals: MTD will initially only apply for VAT registered businesses and will be mandated into HMRC's plans for quarterly bookkeeping and reporting from April 2019. MTD will not become compulsory for other business or taxes until April 2020.
Proposed updated timetable:
• VAT registered businesses, with turnover over the VAT threshold will be mandated into the MTD reporting system from 2019.
• Property landlords and small business trading below the VAT threshold will join MTD from 2020, although they may opt in to MTD earlier if they wish to do so.
• There is no news on what is proposed for companies, however the government is currently looking at reform of corporation tax.
Year Which tax Who Exceptions
2019 VAT Self-employed individuals who are Business with a turnover of
VAT registered than £10,000
2020 Income Tax & Class 4 Self-employed individuals and Business engaged in excluded
NICs landlords activities
2020? Corporation tax Companies The Digitally Excluded
Income tax & Class 4 Large partnerships Insolvent business
NICs Charitable trusts
The government says that it has listened and Mel Stride, Financial Secretary to the Treasury and Paymaster General said: 'Businesses agree that digitising the tax system is the right direction of travel. However, many have been worried about the scope and pace of reforms. We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.'
HMRC has already begun piloting the MTD services and will continue to do so. It will start to pilot MTD for VAT by the end of 2017 with a live pilot starting in Spring 2018.