Making Tax Digital (MTD) will fundamentally change the way UK tax system works and behaves.
On 13 July 2017 the government announced a revised timetable and changes to the implementation of MTD. The headline was that MTD will not take effect until April 2019, and will initially be mandatory only for businesses over the VAT Threshold.
Under the new timescales:
• only businesses with turnover above the VATthreshold (currently £85,000) will have to keep digital records, and only for VAT purposes;
• they will only need to do so from April 2019; and
• businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
The government has given assurances that it will not widen the scope of MTD beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. Property landlords and small business trading below the VAT threshold will join MTD from 2020, although they can opt in earlier if they wish to do so.
As we have said previously, we welcome the innovation being rolled out by HMRC and see it as an opportunity for UK commerce to refine its financial and taxation processes in order to take advantage of the clever, efficient technologies that are at our disposal.
Here at Hartham Financial, our cloud based, real-time platform of applications will mean that the transition to real-time tax reporting for the clients we work with will be easy.
Get in touch if you would like to discuss how MTD impacts your business specifically.