Sara Dennis – Business Services Manager
Bevan & Buckland explain that HMRC are looking to simplify tax reporting. They are trying to move away from only filing taxes annually.
Businesses will submit tax information, for example revenue and expenses every three months, this will start in 2019 for VAT registered businesses.
Three million of the smallest businesses and landlords will be able to move to the new digital system for keeping tax records at a pace that is right for them.
Making Tax Digital will also be available on a voluntary basis, businesses with an annual turnover below the VAT threshold (currently £85,000) can choose when to move to the digital accounting system.
Under the new timetable outlined by HMRC:
- Only businesses with a turnover above the VAT threshold will have to keep digital records (for VAT purposes only) from 2019.
- Businesses and landlords will not be required to keep digital records and update HMRC quarterly, for other taxes until at least 2020.
As VAT already requires quarterly returns, no business will need to provide any more information to HMRC more regularly than they do now.
All businesses will have at least 2 years to adapt to the changes before being asked to keep their tax records digitally.
When will the changes happen?
Making Tax Digital (MTD) is set to come into full effect from 2020. Key milestones include:
- Spring 2018 – Live pilot of Making Tax Digital for VAT begins.
- April 2019 – Businesses with a turnover above the VAT threshold are required to keep digital records and submit quarterly returns for VAT purposes only through their accounting software.
- Businesses are able to voluntarily keep digital records for ‘other taxes’.
- April 2020 – HMRC looks to widen the scope of Making Tax Digital.
For more information on Making Tax Digital. Please contact us on 01792 410100 or via email firstname.lastname@example.org.