Making Tax Digital – should you be worried?
On the 13 July Ministers confirmed a new timetable for Making Tax Digital (MTD).
From April 2019 businesses with a turnover above the VAT threshold (currently £85,000) will need to keep Digital records for VAT purposes.
Businesses below the VAT threshold will now be exempt from requirements to quarterly reporting until the government can reassess the plans. This is likely to be after the current pilot and before 2020.
MTD will be available on a voluntary basis for the smallest businesses, and for other taxes. Businesses and landlords with a turnover below the VAT threshold will be able to opt to use the new digital reporting system but it will not be mandatory until ‘at least’ 2020.
The Treasury document states that 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; and
- businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
These changes will be legislated this Autumn as part of the Finance Bill 2017.
So, should you be worried about what this means for you and your business? In short – No!
We are encouraging all our clients to use bookkeeping software. If your records are up to date and have been entered into bookkeeping software, you will already have the required information under Making Tax Digital.
If you want more information about bookkeeping software or have any questions about Making Tax Digital. Please get in touch on 0113 2864486.
Once we have more details we will issue an update.
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