Making Tax Digital (MTD) may be delayed but it’s not forgotten. The legislative measure, Making Tax Digital for VAT, has been pushed back to April 2019 after MPs and campaigners voiced their disagreement around prematurely introducing the computerised system which would then clash with Brexit negotiations.
The Finance Bill 2017 requires businesses to digitally record VAT reports on a quarterly basis to then be submitted to HMRC.
Who does MTD affect and when?
Under the reformed timetable, businesses with a turnover above the VAT threshold (£85,000) will be required to keep digital records, and only for VAT purposes. This will continue as expected and be implemented in 2019.
Companies earning below the VAT threshold will be exempt until at least 2020.
MTDwill also be available on a voluntary basis to other businesses, for both VAT and Income Tax.
The proposed secondary and tertiary legislation on Income Tax and VAT for businesses affected by Making Tax Digital is subject to anopen consultationwhich closes midday on 10 November 2017.
Reasons behind Making Tax Digital
Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs – meaning the end of the annual tax return for millions.
Every individual and business now has access to their own personalised digital tax account.HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world, modernising the tax system to make it more effective, more efficient and easier for customers to comply.
Autumn Budget 2017: We will be commenting on the Autumn Budget statement 2017, stay tuned.
At Gorilla Accounting, we offer our all-inclusive accountancy for just £85 plus vat per month. If you have any questions, get in touch with a member of our New Business Team by calling 0330 024 0406 or emailinfo@gorillaaccounting.com.
