There is evidence that HMRC’s Making Tax Digital (MTD) implementation team are working with advisors and their clients to beta test the computer systems that will drive the quarterly upload process when it is timed to begin April 2018.
For those readers who may have missed our previous updates on this topic, MTD aims to have taxpayers’ income and other relevant details uploaded to a personal digital account. Banks, employers, pension providers and business owners (including landlords) will have an obligation to upload data to HMRC.
We will of course be helping you through the process and are currently developing our internal systems to ensure a smooth transition.
For business owners and landlords this is quite a change from what we have currently. After various implementation dates it will be necessary to make quarterly, summarised uploads of accounts data and then an annual overall return. In place of the current once a year return.
At present, HMRC is not providing direct access to taxpayers to comply with their MTD obligations; instead, business owners will need to use accounting or other software that is authorised for this purpose.
The present timetable, when businesses will need to start uploading data, is:
- April 2018 – the self-employed, including landlords, with turnover in excess of the threshold, presently £85,000.
- April 2019 – the self-employed, including landlords, with turnover below the threshold but above £10,000.
- April 2020 – companies and other organisations subject to Corporation Tax.
Businesses with income below £10,000 will be excluded from the MTD quarterly upload processes at the moment.
Incredibly, the legislation setting out the rules and regulations for MTD has still not reached the statute books. It was included in the Finance Bill 2017, but the relevant sections and schedules dealing with MTD were deferred for consideration until after the recent election. Professional advisors, software providers, and the business community looks forward to some progress in this area. Presumably, the deferred legislation will reappear in a summer Finance Bill. The intention, we would assume, is to tidy up these loose ends before members of parliament break for their summer recess.
If you are self employed and fall into one of these categories but not currently using a suitable accounting package it’s something that you should be planning to do sooner rather than later. It’s less than a year until the implementation date for the first tranche of businesses, and April 2019 will come around much more quickly than any of us would like.
If you would like to talk to us about how to make the transition to accounting software, or indeed how MTD might affect your systems, by all means get in touch with us here at Jones Harris for a no obligation chat.