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Why choose HGH?

Budget 2017 – Making Tax Digital

Posted: 9th Mar 2017 by Nigel Atkinson Budget 2017, Making Tax Digital, Taxation

Making Tax Digital – an Update.


The Budget gave one small concession on Making Tax Digital (MTD) for those below the VAT threshold for quarterly accounting, but we now await further detail.

 

 

Legislation will be introduced in Finance Bill 2017 that will set out: 

  • digital record-keeping – how to keep records of trading and transactions digitally, and categorise expenses with help from prompts and guidance in the software
  • establishing taxable profit – in particular, exploring when businesses should record accounting and tax adjustments for the purposes of arriving at a taxable profit, and how businesses should reflect reliefs and allowances
  • providing HMRC with updates – how businesses (including sole traders and landlords) should provide HMRC with quarterly updates
  • end-of-year activity – how businesses might finalise their taxable profit for a period, including the activity they may need to undertake and how long they should have to do so.

When will you need to start using the new service?

Businesses, self-employed people and landlords will be required to start using the new digital service from:

  • April 2018 if they have profits chargeable to income tax and pay class 4 national insurance contributions (NICs) and their turnovers are in excess of the VAT threshold
  • April 2019 if they have profits chargeable to income tax and pay class 4 NICs and their turnovers are below the VAT threshold
  • April 2019 if they are registered for and pay VAT
  • from April 2020 if they pay corporation tax.

Businesses, self-employed people and landlords with turnovers under £10,000 are exempt from these requirements.

Those in employment who have secondary income of more than £10,000 per year through self-employment or property will also be required to use the digital service.

Businesses (including the self-employed and landlords) will be able to keep records of their income and expenditure digitally, and send summary updates quarterly to HMRC from their software (or app).

Those who genuinely cannot get online due to their individual circumstances, such as disability, geographical or other reasons, will be exempted from these obligations.

HMRC’s responses to the MTD consultations, which took place in 2016, were published on 31 January 2017. A summary can be accessed here.

Source: ACCA

Read about more changes in the 2017 Budget:

Budget 2017 – Your Guide

Inheritance Tax

Tax Free Childcare

Hunter Gee Holroyd Tax Rates

Contact us

Nigel Atkinson – Easingwold  01347 823569. Email: nigel.atkinson@hghyork.co.uk

Claire Hodsman – York 01904 655202. Email: claire.hodsman@hghyork.co.uk

Robert Salenius – York  01904 655202. Email: robert.salenius@hghyork.co.uk

Paul Morris – Filey 01723 512180. Email: paul.morris@hghyork.co.uk

 

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