Home Business NewsBusiness Making Tax Digital: Businesses need to move with the times

Making Tax Digital: Businesses need to move with the times

14th Jul 17 3:21 pm

This what they said

Androulla Soteri, tax development manager at accountancy firm MHA MacIntyre Hudson, commented on the government’s revised timetable for Making Tax Digital (MTD):  “We welcome the Government’s latest MTD announcements and revised timetable, even though it’s clear that the work involved in Brexit negotiations is likely to be the motivating factor behind it. The profession has long been calling for a reassessment of the exemption threshold as well as a delay in implementation and for VAT to be the first tax that this is introduced for.

“It’s been a tumultuous journey, with the course and design of MTD changing frequently since the concept was introduced almost two years ago. What we need from HMRC now is a plan and timetable that they commit to and do not deviate from. The new measures are positive, but there’s still a lot we need clarity on – we don’t know, for example, which software houses HMRC is working with.

“The message still stands – all businesses need to move with the times. MTD has never been about digital systems, but about firms maintaining their ability to compete in an increasingly competitive market. Achieving this is in part about having up to date financial information to ensure opportunities that arise can be exploited in a timely manner, and executed in a way suitable to businesses’ financial position.

“The new measures will significantly alter digital plans for firms as it is now VAT registered businesses that will be affected first, rather than self-employed tax payers and landlords. This is positive news as it means that the transition should be a lot smoother given that VAT returns are already filed quarterly. There is also less of a culture shift in beginning with VAT rather than Income Tax. The only difference will be that businesses will have to submit VAT returns through software and apps from April 2019, so the effect will only be felt by those that do not already record transactions digitally.

“The self-employed and landlords will have two extra years before they have to implement digital systems for income tax purposes. This is good news as some tax payers were relying on HMRC’s free software to make their submissions, which is more cost effective than paying for monthly licences to software companies. As we well know, this free software was promised but has not materialised and this was a concern under the original timetable of an April 2018 commencement.

“For companies and their corporation tax reporting obligations, 2020 was always the scheduled date. It was a surprise, and still is, why they are being brought in last as many companies already use software and logically it would have been easiest for them to be brought into the regime first.”

Leave a Comment


Sign up to our daily news alerts

[ms-form id=1]