Given recent events (in particular Brexit and the election) it’s not surprising that the Government announced last week that the timetable for Making Tax Digital is delayed.
If you’re not sure how Making Tax Digital might impact on your business then you can click here on our earlier blog for more details.
So what are the major changes to Making Tax Digital?
Making Tax Digital was due to go live from April 2018.
However, given HMRC’s track record on IT implementations (they’re not known for fantastic IT systems!), there was a lot of concern voiced in the feedback to the project received from parliamentary bodies, businesses, the accounting and the tax profession.
Following this feedback, the scope of this project has been reduced and the deadlines have been extended.
What is the current updated timetable?
The current updated timetable is as follows:
- If you run a VAT registered business with turnover over the VAT threshold then you’ll be incorporated into the Making Tax Digital reporting system with effect from April 2019 – however only for VAT. We’re not sure how this will work with the current quarterly VAT returns – which usually have to be filed electronically – or whether it will replace the current VAT return.
- If you’re a Property landlord or a small business trading below the VAT threshold then you’ll join Making Tax Digital from April 2020 (instead of 2018 as originally proposed). However, there is the option to join Making Tax Digital earlier should you wish to do so.
- If you run a company, the future is uncertain as far as Making Tax Digital is concerned. There is no current news on what is proposed for companies – although it is suggested that the government is currently looking at a reform of corporation tax.
What do the proposed changes mean for me?
This will be a welcome relief for a lot of small business owners as this has effectively delayed the original timetable (see here) by 2 years.
However if you are not currently using software for your bookkeeping we’d recommend you look at using an online system (we use Xero and FreeAgent with our clients). The online providers are far more likely to integrate any Making Tax Digital requirements into their systems. That way, when it is finally fully implemented, you’ll be ahead of the game!
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].
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