1st February 2017
HMRC has published details on the process of Making Tax Digital (MTD) that will see businesses and the self-employed managing their taxes online.
After the publication of consultations responses and draft legislation, HMRC has confirmed the following details:
- businesses will be permitted to use spreadsheets to record their receipts and expenditure and submit them online
- self-employed, businesses and landlords with a turnover of under £10,000 per year will not need to make quarterly updates online
- accounting income and expenditure on a ‘cash in, cash out basis’ will be extended
- quarterly updates will not apply to charities
- businesses will have 12 months to adjust to the changes before any late submission penalties take place
- digital systems will be tested with real-life businesses before the official roll out to give businesses time to prepare.
Initial exemption threshold and deferring changes to small businesses will be consulted before MTD is introduced later this year.
Jim Harra, director general customer strategy & tax design, said:
“MTD will help businesses to get their tax right first time; it will help reduce the likelihood of errors, lower the chance of unwelcome compliance checks and give them greater certainty that they are getting things right.
“The appetite for digital services is growing and traditional paper-based processes make no sense in the 21st century where the vast majority use digital services.”
Talk to us about how these changes may affect you and your business.