Making Tax Digital – a step closer

Another matter that received some clarification last week was the government’s move to implement MTD for the self-employed from April 2018.

When the scope of MTD was first published it was proposed that the self-employed (including unincorporated property businesses) would need to commence the quarterly upload of summarised accounts data, direct to HMRC’s digital accounts, from April 2018.

In the budget last week, a relaxation of this deadline was introduced. Only self-employed businesses with taxable income in excess of the current VAT registration limit (£85,000 for 2017-18) will be required to comply with MTD uploads from April 2018. Those with income below the VAT threshold will now have until April 2019 to comply.

Whilst this is a welcome reprieve for smaller businesses, none of the other regulations regarding MTD have been relaxed. In particular, the need to comply with the quarterly uploads if income exceeds £10,000.

It was hoped that government would increase this threshold as it does require very small businesses into a compliance regime that seems out of proportion with their size. For example, a self-employed person with taxable income of just over £10,000 will have to comply with MTD from April 2019 even though their personal tax allowance will eliminate any tax liability for the year.

Clearly, MTD is a major change in the assessment of tax, probably the most impactful since the introduction of self-assessment 20 years ago. Readers affected, should ensure that they are ready to comply and in particular have identified a suitable format for keeping their business records that will facilitate the electronic transfer of data to HMRC.

If you are unsure which software or process to use, please contact us, we can help.

Latest Blog
07
Dec

Planning for higher corporation tax rates

We are fifteen months away from a radical upward lift in corporation tax (CT) rates. ...

Read More
02
Dec

Tax Diary December 2021/January 2022

1 December 2021 – Due date for corporation tax payable for the year ended 28 Fe...

Read More
02
Dec

Budget bad news 27 October 2021

Readers should take note of the following changes: Income Tax Allowances frozen: The ...

Read More
02
Dec

Budget bonuses 27 October 2021

There was little good cheer in the Chancellor’s announcements to parliament on ...

Read More

CONTACT SIMON COOPER