Concerns about the pace and scale of change contained in the seemingly somewhat radical Making Tax Digital proposals have led to a rethink at HMRC to ensure businesses have plenty of time to adapt, this news follows a number of months of uncertainty as to whether or not the initial plans, scope and timetable for the Making Tax Digital, programme, as first announced in the Spring Budget, would be implemented.
Initially this was going to start hitting sole traders and small businesses from as early as April 2018, however the announcement made last week on the 13th July has seen this change for the good.
Following the announcement only businesses with a turnover above the VAT threshold (currently set at £85,000) will have to keep digital records and only for VAT purposes, which they will only need to do so from 2019 now
Businesses will now under the revised proposals issued not be asked to keep digital records, or to update HMRC quarterly, for any other business taxes until at least 2020.
Making Tax Digital and the single tax dashboard will however be available on a voluntary basis for the smallest businesses, and for other taxes, meaning that companies, the self employed and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.
As VAT already requires quarterly returns, under the new plans now no business will need to provide information to HMRC more regularly during this initial phase than they do currently a move that will be welcomed by many, and I know will be good news for many of our clients.
The move to Making Tax Digital was likely to hit small business and the self employed hard, we know from experience many manage their business with manual records maintained either on paper or on a spreadsheet (or in some cases a carrier bag, but the less aid the better there).
MTD would have meant for many of these firms having to take out a subscription to an accounting software, most likely a cloud based package, which whilst they have benefits such as sending invoices on the go and recording expenses in real time cost money eating into what is often slim profits.
Here at SK Accountancy & Business we are Intuit Quickbooks Certified ProAdvisors and have access to some very attractive pricing on a wholesale basis for one such package, and we are happy to pass these heavily discounted rates onto clients both new and old as part of our monthly accountancy packages as a way of saying thank you for choosing to work with us – just get in touch for more information