Making Tax Digital – a slower rollout than promised, but it’s still going ahead – Michael LansdellFeatured Products Promotional Features
Posted by: The Probe 22nd September 2019
Where are we now with Making Tax Digital (MTD)? Well, most of you will know that the pace of change has slowed down somewhat.
In 2017, a new timetable for MTD was announced, in response to concerns that many small business owners, as well as the Treasury Select Committee, had about the speed and scope of the proposed changes.
The slow-down was confirmed in this year’s Spring Statement. The government said it pledged to support businesses with their transition to MTD and therefore would not be making it mandatory for new businesses or taxes until 2020. Briefly, businesses are not obliged to use MTD software for any taxes other than VAT until April 2020 at the earliest.
With regards to MTD for VAT, there are rules around timing:
- A business will only need to keep digital records and use the MTD software if it has a taxable turnover above the VAT threshold of £85,000 and is not in the deferral group (see below). A business that fits the criteria is now required to use MTD for VAT periods that started on/after 1 April 2019.
- For VAT-registered businesses in the deferral group, mandation to MTD is now delayed until October 2019. What factors might put a business in the deferral group? Having more complex VAT requirements such as being a public corporation and if it uses the annual accounting scheme. This list is not exhaustive, so check with your accountant.
When the MTD proposal was first published in 2015, it promised great benefits – an exciting vision of a tax system that was “fit for the digital age”, by being easier, faster and more efficient.
My advice then was wait, and keep your tax affairs in impeccable order to ensure that your practice’s transition to the digital era is as smooth as possible. The pace may have slowed down, but MTD is still going to happen, so you need to stay prepared. Enlist the services of an accountant that has the knowledge and experience of working for and with dental practice owners, such as the specialist team at Lansdell & Rose. This way, however long the
roll-out takes, you will be one step ahead and ready for a hassle-free switch to digital.
For more information please visit www.lansdellrose.co.uk
or call Lansdell & Rose on 020 7376 9333.