Making Tax Digital Delayed - What This Means For You
Making Tax Digital is the new initiative from HMRC to ensure businesses in the UK are keeping digital records and filing on a quarterly basis.
This week, HMRC announced that they are making significant changes to the Making Tax Digital scheme.
There were concerns that the scheme was too ambitious/aggressive to meet the originally proposed deadline of April 2018. There was plenty of feedback from accountants, businesses, software companies and parliamentary bodies and HMRC have now reviewed the timetable for Making Tax Digital and the changes are as follows;
Only businesses that exceed the VAT threshold (£85,000) will be required to keep digital records, and it only needs to be for VAT purposes. This will be the requirement from 2019.
The original date of 2018 has been replaced with at least 2020, giving businesses an extra 2 years to get ready for the new changes. They will not be asked to keep digital records or update HMRC quarterly for other taxes until this time.
Small businesses will have the option to file digitally on a voluntary basis for other taxes if they wish to do so.
Thankfully, all of our clients here at Cone Accounting are ready for Making Tax Digital - storing your records digitally and running your business from a platform like Xero means that most of the burden above is already taken care of.
We're big advocates for going digital and bringing your business, and records, to the cloud but it's positive to see that some more time is being spent to ensure that the transition is smooth and that no one is rushed or pressured into anything too quickly.
It's important that businesses are not rushed into making these changes and that the accounting industry (and the software that goes along with this) is given the time it needs, so there is adequate support for businesses when they decide to make the move.
If you have any questions about how Making Tax Digital affects you or would like to speak about moving your records to the cloud then please let us know and we would be happy to help.
About the author
Ben Nacca is an accountant but is nothing like the stereotype you have visualised in your mind! He has worked in the accounting industry for almost a decade and is CEO here at Cone.
Ben loves travelling the world, playing video games and playing his acoustic guitar whenever he finds the time between spending time with his two chihuahuas, Hugo and Pablo!