Making tax digital update
Making tax digital for business (MTDfb) is a new government project to overhaul how taxpayers record and report income to HMRC. The project is to be implemented in stages over the next few years.
The government has confirmed in the Budget that some of the requirements have been deferred for another year. The result of this announcement is that unincorporated businesses and unincorporated landlords with annual turnover:
- More than £85,000 (VAT threshold) will need to comply with the requirements of MTDfB from the start of accounting periods which begin after 5 April 2018
- More than £10,000, but under the VAT threshold will need to comply from the start of accounting periods which begin after 5 April 2019.
Companies and partnerships with a turnover above £10 million will not be required to adhere to digital reporting requirements within MTDfB until April 2020.
Draft legislation has been issued to show how MTDfb will operate, and further details are covered in the Finance Bill 2017.
MTDfb will have the following requirements for businesses, self-employed and landlord:
- Digital reporting using cloud-based software, such as QuickBooks
- Quarterly reporting to HMRC using a Digital Tax Account
- Provide an end of year declaration to HMRC using the DTA
If you would like more advice on getting ready for the digital tax account please get it touch.