The current tax year, 2017-18, is the last year we have to prepare for the advent of the new reporting system, Making Tax Digital for Business (MTDfB). Following the recent budget, it is now clear which businesses are going to be affected and when. Dates for implementation will be:
- From April 2018, unincorporated businesses (including landlords) with gross income (turnover) above the VAT registration threshold (£85,000 for 2017-18) will be required to comply with the quarterly upload of summarised accounts data to HMRC.
- From April 2019, unincorporated businesses (including landlords) with gross income (turnover) below the VAT registration threshold (£85,000 for 2017-18), but above £10,000, will be required to comply with the quarterly upload of summarised accounts data to HMRC.
- From April 2019, filing for VAT purposes will also be bought within the scope of MTDfB uploads which will replace the current, quarterly VAT returns.
- From April 2020, filing for Corporation Tax purposes will be bought within the scope of MTDfB uploads.
In spite of intense lobbying by accountancy organisations and other small business groups, HMRC will require all businesses with taxable income in excess of £10,000 to comply with the upload of summarised accounts data when MTDfB applies as set out above. It was hoped that this exemption limit would be higher.
There we have it. The digitisation of tax reporting is well and truly underway – the most significant change since the introduction of Self Assessment almost twenty years ago.
Here at Jones Harris we have been closely following the development of this new legal requirement and are in the process of adapting our systems to allow a smooth transition. You can rest assured that we will be doing everything that we can to help and assist our clients in the run up to the introduction and we will be talking to everyone who will be affected before the relevant dates.
If you do want to talk about how Making Tax Digital affects your business then please get in touch.