The news we’ve all been waiting for! Following the withdrawal of Making Tax Digital (MTD) from the 2017 Finance Bill, due to the June 2017 election, everyone has wondered whether it will be re-instated.
The word on the tax street was that it would continue in April 2018 as planned, as the trial was already running.
However HMRC announced this week that it is in fact being delayed, and significant changes being made. So most small businesses can breath a sigh of relief.
The original plans were set out in our previous post, and were due to come in for all businesses above the VAT threshold (currently £85,000) in April 2018.
What’s Happening Now and How Does it Affect Me?
Only businesses with a turnover above the VAT threshold will have to keep digital records and only for VAT purposes. They will only need to do so from 2019.
Businesses will not be asked to keep digital records or update HMRC quarterly for other taxes until at least 2020, instead of 2018 as originally proposed.
Small businesses will be able to file digitally on a voluntary basis for other taxes.
This is so much more sensible, as the original plans would have been a huge burden to some small businesses.
However, it’s certainly not a secret that we advocate cloud accounting, and automating as much as possible. We ourselves run our business 100% online, and help other businesses to do the same. We see how the cloud and automation can vastly improve efficiency, profits and cash for small businesses, and will help you achieve this wherever we can.
We are always investigating new innovations, with a focus on time and financial efficiencies. We do this by questioning whether a particular process can be improved by discussing solutions on a daily basis with our internal team, clients and software developers.
Gary Turner is XeroUK’s MD, and within hours of HMRC’s announcement put this video up online. It makes everything clear.
If you’d like to discuss how this affects you, please get in touch.