A little background
“Ministers confirm a new timetable for Making Tax Digital ” … An apt understatement from a Government without direction. The new announcement, on July 13th, 2017, stated that “three million of the smallest businesses and landlords will be able to move to the new digital system for keeping tax records at a pace that is right for them.” The delay is a nod to the realities that both individuals, small and micro businesses, accountancy firms and software companies aren’t ready for the superfast implementation.
The new developments now mean that larger VAT-threshold businesses will have to become compliant by April 2019 but those below will be asked to incrementally go digital by early 2020. The Treasury believe this new stance was a response to the unpopularity of the MTD digital mandatory quarterly reporting timetable which saw an April 2018 deadline. Many smaller businesses and individuals found the timetable too rigid for their micro business demands. The 12-month delay for nonincorporated businesses and the further changes to individuals mean a longer MTD timeframe.
What do SMEs need to do?
If your business has a turnover above the VAT threshold you will have to keep digital records. This will come into force by April 2019. However, businesses will not be asked to keep digital records or update HMRC quarterly, for tax related issues, until at least 2020. SMEs can digitally file on a voluntary basis but it is not mandatory. Now the wider sectoral thinking is that since VAT is already quarterly, the provision of information will not change in terms of regularity in relation to how it stands today.
In technical terms, Making Tax Digital will enter a period of BETA testing in spring of 2018. This is a testing period to ready the platform for April 2019. Big software companies, like QuickBooks believe the move “will help make it easier and quicker to manage taxes without having to fill in so many forms.” However, technically, some companies are glad of the extra testing time and a shortage of technical staff at HMRC is also helping to slowdown implementation.
Why not get in contact with a MTD specialist accountancy firm?
Organisations, like Prestige Business Management, understand the disruptive nature of MTD and the wider impact on accountancy software. Their specialist MTD advisors can help SMEs navigate the pitfalls of going digital and can provide bespoke assistance and training to help make the conversion simpler and more effective. Why not get in touch with the team today? You can call our MTD specialist advisers on 0203 773 2927 or alternatively why not email the team directly at info@prestigebm.co.uk for more information?
