MTD Is Almost Here!
Since last informing our clients of the impending introduction of Making Tax Digital, the Governments’ plan to introduce digital financial reporting by all businesses on a quarterly basis to H M Revenue and Customs, further clarification and changes have been announced. The purpose of this newsletter Is to update you on those latest developments. The Spring Budget confirmed that Making Tan Digital is to commence from 6. April 2018.
The first businesses to be affected will be the self-employed or landlords with income (turnover not profit) in excess of the Vat threshold —currently £85,000, with an accounting period commencing on or after 6u April 2018.
If therefore you are self-employed and your financial accounts run to 31. March, your first accounting period to tall within MTD will be the year commencing 1. April 2019, however, if your financial year-end is for example 30. April 2018, then MTD will commence for you from V May 2018 and will require quarterly reporting from July 2018.
For the self-employed and landlords with income below the Vat threshold (and above £10,000), MTD will come into force from 5° April 2019, ie these smaller businesses are to be given one years’ grace.
Also from April 2019, all Vat registered businesses, whether incorporated or not, will have to file their Vat returns under the MTD Regime ie digitally.
Finally, large unincorporated businesses, with a turnover in excess of £20m, will join MTD from April 2020, alongside Corporation Tax reporting for Companies, although companies will have become part of MTD from 2019 if they are registered for Vat.