Making Tax Digital (often referred to as MTD) has been introduced by the Government to make it easier for businesses and individuals to get their tax right and to keep on top of their tax affairs, which will eventually mean the end of the annual tax return. Everybody that is affected by MTD will eventually need to file quarterly returns with HMRC, using some form of digital software.
Originally announced in the March Budget 2015, it was set to come into place from April 2018, when self-employed individuals and unincorporated landlords with a turnover of more than £85,000 would need to start using the new system.
However, this original plan has now been postponed until April 2019 when only businesses above the VAT threshold (the £85,000 mentioned above) will need to start keeping digital records and file their VAT returns using MTD compatible software.
The start date for the full blown quarterly reporting will not be until "at least 2020" according to the latest ministerial statement. As we get nearer to 2020 the Treasury plans to reassess the situation and review the mandatory requirements.
Although the start of MTD was postponed by a year or so, this is still something that we believe will be rolled out to everyone in due course. We are therefore still looking into how MTD will affect our clients and will continue to keep track of how things progress over the next few years. We will be keeping an eye out for any changes that may occur, including details of planned legislation to be released regarding MTD and also what software requirements and options are currently available or will become available for our clients.
If you have any questions or would like further information regarding MTD please contact us.
Please find below links to various articles about MTD that may be of interest to you:
CCH Daily article published on 13 July 2017:
AccountingWEB MTD timeline dated 21 July 2017:
Podcast from AccountingWEB issued 23 July 2017: