Making Tax Digital

HMRC are proposing that, as part of Making Tax Digital (MTD), every taxpayer has their own digital account with HMRC to which they will have access and be able to manage their tax affairs. 

The current proposals are that unincorporated and property businesses with turnover in excess of £10k will have to make quarterly reports to HMRC. This is due to be implemented starting April 2018 and HMRC say that this will reduce burdens for tax payers and give them earlier warning of their tax liabilities.

MTD will be introduced in phases: April 2018 for income tax and National Insurance obligations; April 2019 for VAT obligations and April 2020 for corporation tax obligations.

This reporting process will have to be accessed through digital software. The use of spreadsheets and hand-written documents will no longer be acceptable.

Carolynn Pissarro, Partner at Griffin Chapman commented, “In principle this sounds like a wonderful idea, but the timescale for implementation is very tight, and the mandatory use of software for small businesses draconian.   

We are hoping that HMRC will delay the implementation of this for 12 months in order to give more time for consideration of the implications.

Over the next year, Griffin Chapman will be looking at their clients’ individual requirements and helping them to choose the appropriate software.”

To find out more, you can read the HMRC’s announcement on MTD. 

If you have any questions regarding MTD or its implications, please call us on 01206 842000.

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