Making Tax Digital for Business
Keeping you informed
In August last year HMRC released six consultation documents on Making Tax Digital (MTD) and from 2018 the tax system will become increasingly digital with most businesses, the self-employed and landlords, needing to use software or apps to keep their business records up to date on a quarterly basis. Since then, the Government has removed MTD from the draft Finance Act due to the general election. We are, however, of the firm belief that digitisation of tax is inevitable.
Details of MTD
The original draft legislation included the following details about Making Tax Digital:
All self-employed individuals, partnerships, landlords and incorporated entities with combined income over £10,000 will be required to keep digital records of all their income and expenditure.
Quarterly submissions of financial information to HMRC will be required in addition to an end of period statement and final declaration making at least six submissions in total, as opposed to one annual tax return at present.
HMRC will not provide you with the tools for digital record keeping and submissions.
When will this affect me?
The original timetable for Making Tax Digital implementation was:
Income tax (sole traders, partnerships, LLPs and landlords) with combined income over £85,000 from April 2018.
Income tax (sole traders, partnerships, LLPs and landlords) with combined income over £10,000 and less than £85,000 from April 2019.
VAT from April 2019.
Corporation tax from April 2020.
Summary
Making Tax Digital poses significant changes for businesses and landlords. Although the details are yet to be finalised, we will be here to advise and support you as we enter this new phase of digital taxation.