Making Tax Digital

Making Tax Digital – Quarterly reporting to HMRC now delayed

July 25, 2017

Government delays Making Tax Digital for income tax self assessment. Learn what this means for your business and how TAG Accountants Group can help you.

How the Delay of Making Tax Digital Affects Your Business

In our role as tax accountants, we have previously reported on HMRC’s Making Tax Digital (“MTD”) plans which had indicated that some small businesses and landlords would be affected from April 2018.

At the time, the team here at Chartered accounting firm TAG Accountants had highlighted our concerns regarding this timetable in that it initially targeted the very businesses which would most likely have to make the biggest changes to comply with it.

We are now pleased to report that its implementation is now to be delayed, so on behalf of our all clients and the many other accounting firms who had joined in the debate, we thank HMRC for listening!

What was MTD all about?

The original MTD proposals applied to sole traders and partnerships with more than £10,000 of annual turnover with effect from April 2018.  Limited companies or their directors would be covered in a later quite separate consultation.

As originally drafted, MTD required businesses to send summary data to HMRC each quarter consisting of total income and total expenditure, with the expenditure itself then broken down into categories such as motor expenses and advertising.

Each business would then have had nine months after its year end to file an End of Year declaration finalising the annual figures.

So, what has changed?

In summary, the key changes are as follows:

  • Only businesses with a turnover above the VAT threshold (currently £85,000) will now have to keep digital records and then only for VAT purposes. This will take effect from April 2019
  • These businesses will not be asked to keep digital records or to update HMRC quarterly, for other taxes until at least 2020.
  • Smaller businesses will be able to file digitally on a voluntary basis for other taxes.

What should you do?

The important thing to bear in mind is that the MTD proposals have not been scrapped, just delayed. Businesses and individuals that are going to be affected by this have more time to get ready but should consider urgently switching to a Cloud based accounting system that will also bring other benefits outside of just dealing with MTD. These systems are very simple to use and enable users to feed transactions direct from their bank and even to photograph receipts and invoices which are then emailed directly into the system at the touch of a button.

Cloud Accounting

We can offer you a variety of Cloud accounting packages to suit all your requirements together with full support and training too, so if you would like to explore your options and get your business ready for MTD well in advance, contact the accountancy team here at TAG Accountants.  To do that, just call 01902 783172 or alternatively click HERE to contact us by email. We very much look forward to hearing from you.