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Making Tax Digital (Updated 14th July)

06-Apr-2017

Making Tax Digital (Updated 14th July)

UPDATED - 14th July 2017 -

…. And breathe out!

We now have dates for Making Tax Digital and, you may be pleased to hear, it is no longer scheduled to start in April 2018.  Instead, businesses with turnover above the Vat threshold (£85,000) will be required to keep digital records for Vat purposes only from 2019The remainder of businesses, including rental, sole trade and partnerships that are below the VAT threshold, and limited companies, will not need to make quarterly returns until 2020.

We will be contacting all of our clients who will be affected by the changes, particularly those who need to be on the ball by 2019, in order to establish the best solutions for your particular business that will get you ready for keeping the digital records that HMRC require.  Between us we will ensure that each client has a workable solution that meets their particular needs in order to ensure a smooth transition into this new phase of HMRC reporting.

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6th April 2017 -

You may have seen in the media that the government is moving towards a fully digital tax system by 2020. HMRC will soon require businesses and landlords to file quarterly accounts electronically using recognised accounting software.

It is now time to ensure that your business is ready to deal with the challenges that this will present.

We do not propose to explain the changes in depth in this letter, but do want you to know that we will be completely prepared to deal with Making Tax Digital (MTD) and assist you throughout the process.

Firstly, if you are a self-employed business owner or a landlord and your turnover is below £10,000 a year, then you should not need to worry, as under the current proposals you will not need to make returns under the scheme.

For those businesses with turnover above this limit, entry into the MTD system will be staggered so that businesses will be introduced gradually over a three year period. Current Government proposals are as follows

  • April 2018 for sole traders, partnerships and landlords with turnover in excess of the VAT threshold (currently £85,000).
  • April 2019 for sole traders, partnerships and landlords with turnover below the VAT threshold.
  • April 2020 for companies paying Corporation Tax.

The accounting industry is putting pressure on the government to raise these thresholds and extend these deadlines so we will keep you informed of any changes as they arise.

HMRC is still reviewing exactly how this will work in practice, if you do have any questions at this stage, please let us know.

You do not need to do anything at present, we just want you to be aware that this is on the horizon and we will let you know what you need to do in good time.

For more information just give us at Bright Brown a call today on 01983 523361.

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