Following the announcement of a snap general election to take place on 8 June 2017, the Government dropped clauses relating to Making Tax Digital from the Finance Bill 2017 so that it could quickly receive approval from MPs before Parliament dissolved. The policy is now on hold until after the election.
While Making Tax Digital is currently on hold, the Government has said that the clauses dropped from the Finance Bill remain policy and it intends to put forward legislation at the start of the new Parliament to enact them.
We will update this page as details of any new legislation are announced after the election.
By 2020 all businesses and individuals will have access to an online digital tax account under proposals put forward under the Making Tax Digital Campaign.
This signifies a major change in the way tax is assessed and managed – requiring all businesses and individuals to use HM Revenue & Customs-friendly software in order to comply with their reporting requirements.
For businesses with a turnover over £10,000 this change to the tax regime will also mean that they will have to prepare quarterly updates and keep their records digitally. HMRC will use this information to formulate a business’s annual tax bill.
Under the current proposals, which are currently under consultation, businesses may also be able to:
- update and assess tax information in real-time
- make voluntary early payment of tax owed through an online payment system
- account on a simplified cash basis, rather than accruals, if their annual turnover is below a set amount (likely to be between £100,000 – £166,000).
Alongside this HM Revenue & Customs will be able to access third party information via banks and other institutions allowing them to complete certain aspects of the online accounts, which may prove useful for some businesses and individuals, but that will need to be checked for any irregularities or errors.
At RDP Newmans we are taking a proactive approach to these changes to ensure businesses are prepared for the challenges ahead, by offering our expertise and experience with online accounting software.
We use a number of HMRC-approved online accountancy software products including Sage, Xero and QuickBooks, which are quick and easy to set-up and use – allowing you to take control of your finances on the move.
So why not get ahead of the game by signing up to our online accountancy services, so that you and your business are prepared for the future of digital tax.
To find out more about our online accountancy services, please contact us.
- Businesses below the VAT threshold to be exempt from Making Tax Digital
- Labour pledges to exclude small businesses from quarterly digital reporting if MTD is reinstated
- Making Tax Digital dropped from Finance Bill ahead of General Election
- Almost half of SMEs think Making Tax Digital will overcomplicate tax, study reveals
- HMRC launches digital tax pilots
- HMRC launch MTD pilot for “hundreds of thousands” of businesses
- ‘True costs’ of Making Tax Digital still unclear, says Treasury Committee
- Consultation on late submission penalties for MTD
- Fines of up to £3,000 for failure to comply with Making Tax Digital, says HMRC
- One-year delay to MTD for small businesses ‘not enough’
- HMRC defends Making Tax Digital timescale at House of Lords
- Taxman offers concessions on MTD
- Making Tax Digital faces fresh criticism from House of Lords
- HMRC will ask thousands of sole traders to ‘trial’ Making Tax Digital this year
- HMRC publishes long-awaited responses to Making Tax Digital consultations
- Government will respond to Making Tax Digital consultations in January 2017