Making Tax Digital - the latest developments.
Following the General Election, and since our June bulletin, the government has outlined a revised timetable and reduced scope for the implementation of MTD. As such we thought this would be a good time to update our clients.
With effect from April 2019, under the new timetable:
- Businesses that are VAT registered, and with a turnover above the VAT registration threshold (currently £85,000), will in addition to mandatory quarterly submissions, have to keep digital records, for VAT purposes only
- Businesses which are VAT registered, but have a turnover below the VAT registration threshold, will not be included at this stage. However, it is anticipated that they will be brought into the scope of MTD in the future
For other taxes, businesses will not be asked to keep digital records, or to update HMRC quarterly and we anticipate that this will be the case until, at least, 2020.
Effectively, the latest changes to the timetable have resulted in all businesses (including landlords) with a turnover below the VAT registration threshold (whether registered or not) being unaffected by MTD until 2020, at the earliest.
It is our understanding that the initial, mandatory, quarterly MTD submission for VAT purposes will be the first VAT return commencing on or after 1 April 2019.
We believe that the government’s decision to delay the implementation of MTD is a sensible one and strongly recommend that all businesses take the opportunity to start planning for, and implementing, a recognised accounting software package in readiness for the new regime.
- For those businesses that already have an established software solution in place, we would again recommend that you contact your software provider to confirm that their software will be compliant with MTD.
- Those clients for whom Scott & Wilkinson undertake bookkeeping and VAT return preparation, can rest assured that we will be taking care of MTD on their behalf.
Finally, we cannot recommend too highly, that all our clients begin preparations for Making Tax Digital. Implementing the necessary steps, as soon as possible, will ensure that they are ready for their relevant deadlines, and can enjoy a smooth transition.
Should you require any further advice or information, please do not hesitate to contact the office. We will happy to arrange a time to meet up and discuss your individual requirements.
Author: Alan Taylor FCCA
A former pupil at Ripley St Thomas C of E High School in Lancaster, Alan joined Scott & Wilkinson directly from school in 1994 and qualified as an Accountant in 2001. Alan is responsible for a variety of clients operating in...
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