HMRC have embarked on a massive project, Making Tax Digital (MTD), to insist that most businesses, including sole traders and landlords, keep their accounting records using computer software with the aim that the software will automatically update HMRC with relevant data on their business income and expenses on a quarterly basis.
EQ have set up a specialist team to ensure that our clients are guided through the process with the minimum of disruption and we expect to be in regular contact with our clients as the changes become closer to implementation.
You can find more information on Making Tax Digital within our dedicated brochure, which you can read through and download here.
Contact one of our taxation experts to discuss how these changes will affect you and how we can help guide you through the process.
Following it’s removal from the Finance Bill earlier in the year, the treasury has issued guidance as to its revised plans for Making Tax Digital.
Under the original plans, businesses and landlords with turnover in excess of £10,000 would have been required to submit mandatory quarterly reports. With those who are VAT registered commencing from April 2018, and those below this from April 2019.
HM Treasury have reconsidered the timetable and reporting requirements, following on from concerns raised by professional advisors and software providers and issued new guidelines.
The new guidelines published by the HM Treasury state :
Under the new timetable:
The VAT testing phase opened to the public on 16 October 2018, meaning that any businesses that meet certain eligibility criteria and are currently using MTD compliant software can now sign up in advance of the mandatory adaptation date of 1 April 2019.
HMRC have also announced a 6 month deferral for a small group of complex businesses, with those listed businesses being mandated to use MTD from 1 October 2019. You can find out which businesses are included here.
It is important to plan for any new systems and processes to be in place long before this deadline to ensure that businesses are fully compliant.
EQ will continue to offer our clients proactive advice to ensure that all requirements of MTD legislation will be satisfied by our clients.
Should you have any queries with regard to this or any aspect of your accounting records, then please contact us.
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