It’s the new tax year. The big change is the implementation of Making Tax Digital (MTD).
It applies to VAT only for those businesses with turnovers above the £85,000 threshold. It’s set to be rolled out soon to other business and personal taxation.
However, there are changes in the future timeline.
On April 1st (2019) HMRC updated their MTD webpage to say:
“Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world.
Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is: more effective, more efficient [and] easier for taxpayers to get their tax right”
Most VAT registered businesses must now operate within MTD requirements.
In other words, their VAT data must communicate with HMRC digitally only.
The main changes come a bit further down the HMRC website.
In the Chancellor of the Exchequer’s Spring statement on March 13th, Philip Hammond said “The government can confirm a light touch approach to penalties in the first year of implementation. Where businesses do their best to comply, no filing or record keeping penalties will be issued.”
This answers one of the main concerns that businesses have expressed. In trying to implement the new system, they would fall foul of onerous penalties. Just for making innocent mistakes.
The Chancellor also confirmed that the focus of MTD will be on supporting businesses to transition to the new system.
He announced that the government will therefore not be introducing MTD for any new taxes or businesses in 2020.
Originally, it was announced in April 2020 that MTD was to be implemented for non-VAT businesses.
How Spectrum can help
Spectrum Accountancy Solutions have a comprehensive service to support you in becoming MTD compliant.
Cloud computing is the only viable option for most businesses.
Keeping VAT records on a local PC or server won’t guarantee the required 6-year life expectancy.
There will be a delay for smaller businesses. However, this does not mean it is time for them to relax.
The best time to ensure you’re compliant is when new dates are announced.
To conclude, in a world where government deadlines seem increasingly fluid, Spectrum are here to support your business in working with HMRC.
Get in touch to discuss your specific situation.
Categorised in: Archived
This post was written by Daisy Vowles