Making Tax Digital Update
The plastic bag full of accounting records and receipts is a common sight for many accountants’ offices.
As the Government’s plans for digitalisation build momentum, it is becoming apparent that businesses can no longer rely on their plastic bags and therefore face a significant challenge.
The government published its responses to the six consultations on making tax digital (MTD).
The headlines of which were:
- businesses will now be able to continue to use spreadsheets for record keeping, but they must ensure that their spreadsheet meets the necessary requirements of Making Tax Digital for Business – this is likely to involve combining the spreadsheet with software
- businesses eligible for three line accounts will now be able to submit a quarterly update with only three lines of data (income, expenses and profit)
- free software will be available to businesses with the most straightforward affairs
- the requirement to keep digital records does not mean that businesses have to make and store invoices and receipts digitally
- activity at the end of the year must now be concluded and sent either by ten months after the last day of the period of account or 31 January, whichever is sooner
- charities (but not their trading subsidiaries) will not need to keep digital records
- for partnerships with a turnover above £10 million, Making Tax Digital for Business is deferred until 2020.
As they announced a one year deferral from the mandating of Making Tax Digital for unincorporated businesses and landlords with turnovers below the VAT threshold in last week’s budget, it is clear they are now recognising the scale of the challenge ahead for owner managed businesses.
We are planning a series of seminars to help businesses prepare for the change. To register your interest and to discuss the options further please contact us.
Want to know more? Call us on 0116 276 2761 or email firstname.lastname@example.org