Making Tax Digital - HMRC working with tax agents
13 March 2017
The responses to last year’s Making Tax Digital consultations were published on 31 January 2017. Amongst other things, these confirmed that businesses will be able to continue to use spreadsheets for record keeping but their software must be able to interact with those spreadsheets so that the requirements of MTDfB are still met. Those businesses eligible for three line accounts will be able to provide quarterly updates on that basis.
The Budget announcement on 8 March confirmed that businesses (including the self-employed and landlords) that have annual turnover below the VAT registration threshold will have an extra year before they are required to keep records digitally and send HMRC quarterly updates. This will give 3.1 million small businesses with more time to prepare for Making Tax Digital.
Those with annual turnover above the VAT threshold will still be required to keep digital records and send HMRC quarterly updates from April 2018. The exemption threshold, previously announced, will remain at £10,000.
From April HMRC start their live pilot of the changes with businesses and agents. They will start with small numbers but aim to have hundreds of thousands of small businesses and their agents taking part.
HMRC would really appreciate your help in recruiting any of your clients who may be interested and fit the profile of the sort of business they are looking to help them initially.
There will be a further update in the spring but in the meantime you can respond in the comments box at the end of this Blog.