Local accountants and tax advisers, Trueman Brown, warn businesses about HMRC’s new tax system, Making Tax Digital.
When presenting his 2015 Budget, the then Chancellor, George Osborne, announced the end of the annual tax return
The following October when presenting his Autumn Statement, George Osborne announced that the existing tax system would be replaced by Making Tax Digital (MTD) from 6th April 2018 onwards.
Despite the planned speed of the implementation of MTD, HMRC has always been very sketchy about the details such as:-
- which taxpayers would be affected by the new system;
- what format would the information need to be filed using
- what information would taxpayers be required to file; and
- what was the penalty regime for non-compliance going to be like?
Giving these uncertainties and, of course, the time span for getting tax payers ready for the new regime, many business groups have been consulting with the government to postpone the implementation of the new system.
The government recently announced that it was postponing the April 2018 start date for the implementation of the systems. Under the new plans, the new timetable for implementation will be:-
- businesses trading with a turnover above the VAT threshold will have to keep digital records from April 2019 onwards. Businesses caught by this point will have to file their VAT Returns quarterly digitally. This does not represent an onerous task because VAT Registered businesses already file their Returns quarterly.
- Other businesses and landlords will have to implement MTD from April 2020.
Small business organisations have announced the new timetable as a result for common sense.
However, given the fact the current Chancellor, Philip Hammond, seems to be led by his department, businesses hoping that MTD will never be implemented are unlikely to have that wish granted,
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