HMRC are in the process of moving to a fully digital based tax system called ‘Making tax Digital’ (MTD).
Under the current proposals this will be phased in as follows:
Tax year 2018/19 – Unincorporated businesses, self-employed individuals and unincorporated landlords with turnover over the VAT threshold.
Tax year 2019/20 - Unincorporated businesses, self-employed individuals and unincorporated landlords with turnover below the VAT threshold but over £10,000.
Tax year 2019/20 – all other VAT registered businesses.
Tax year 2020/21 – all other businesses who pay corporation tax including incorporated landlords.
What does it mean for me?
All businesses will be required to become compliant with MTD by 2020/21.
The timing will depend upon the nature of your business and your level of turnover and you will move into the MTD regime from the start of your accounting period commencing in the relevant tax year as set out above.
Once you are in the MTD regime you will be required to submit returns to HMRC on a quarterly basis.
How can Additions help me?
We can help you to prepare for the move to the digital tax system by working with you to improve the quality of your record keeping so that gathering together the information for the quarterly returns is less onerous, whether you choose to prepare them yourself, or we do it for you.
We can also advise on the most appropriate year end for your business and make any necessary changes ahead of the introduction of the new system
What should I do now?
Contact us today for advice on MTD and what it means for your business.