Government announces new timetable for Making Tax Digital

 

The government has announced a revised timetable for the introduction of Making Tax Digital (MTD). The original plans were put on hold following the snap general election in early June this year.

Under the new timetable:

Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes.

They will only need to do so from 2019.

Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.

Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes.

This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.

As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.

All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.

The government has also confirmed that the proposed changes to VAT reporting will come into effect from April 2019. From that date, businesses trading above the VAT threshold will have to provide their VAT information to HMRC through MTD software.

Although these changes will not be introduced for a couple of years it’s a good idea to go digital sooner rather than later saving you time and stress further down the line.

We are already working with an increasing number of our clients to put in place digital record-keeping systems through moving to a Cloud based system. As QuickBooks Platinum ProAdvisors we are in a strong position to offer topical and relevant advice to all our clients.

However, we will always advise on the best package for your business which is why we can also discuss the suitability of both SageOne and Xero.  We will work with you to ensure an efficient transition and provide ongoing advice and training.

In addition to facilitating the change to digital reporting, moving to the Cloud brings with it a number of additional benefits, saving time, unnecessary paperwork and increased efficiency.

Please call your local Lentells office for an informal discussion of the benefits of moving your accounts to the Cloud.