Making Tax Digital Update
On 30th April 2018, HMRC announced that the plans to have a fully reformed tax system by 2020, had been put on hold due to resources being deployed elsewhere within HMRC, mainly to deal with Brexit. In the press release, they acknowledged that had they continued on their current path, there would not have been the smooth transition to a digital system that they had hoped for by 2020.
The delay does not affect VAT registered businesses. Businesses who have had to mandatorily register for VAT will still be required to keep digital records for the first quarter starting after 1 April 2019, however businesses who have voluntarily registered can opt into digital record keeping should they wish to do so.
The announcement does however delay the digital reporting for income tax and corporation tax purposes, which was scheduled to come in one year after (provided that the system had been proven to work for VAT!). This announcement to delay MTD for income/corporation tax is not a huge surprise, as many professionals for a long time have assumed that HMRC has exceeded its capacity in trying to take on such large scale project. As the goal posts for Brexit couldn’t be moved, it was obvious that it was MTD who needed to take a backseat for a while.
We await another announcement soon, however it is thought that digital and quarterly reporting for other taxes will not be implemented until April 2020 at the earliest.
The content of this article is for general information only and does not constitute tax advice. It should not be relied upon and action which could affect your business should not be taken without appropriate professional advice.
Ellie Hammett ACCA
Ellie started with Evolution ABS in April 2010, gained her AAT qualification in September 2012 and fully qualified as a Chartered Certified accountant in December 2015. Ellie now manages a portfolio of mainly agricultural clients. Ellie works part time and is in the office on Monday - Thursday.
Ellie grew up on her parents’ dairy farm in Dorset, before moving to Devon in 1998. She now lives with her husband on his family beef and sheep farm in East Devon.
In her spare time, Ellie enjoys helping out on the farm (although not so much the night time lambing) and used to be an active member of Whimple and Broadclyst Young Farmers Club, competing in speaking competitions, drama and showing stock.