HM Revenue & Customs are continuing to work hard on the complex rollout of the Making Tax Digital (MTD) programme. HMRC state their vision is to have a modern digital system, which works closer to real-time, making it easier for customers to pay the right tax ...
HMRC are continuing to work hard on the complex rollout of Making Tax Digital!
So, where are we now? Firstly, you've probably already heard of MTD for VAT or may even be part of the programme for your own business, although around 100,000 businesses that should have already been part of MTD by the 1st of April 2021 have yet to join the party.
HM Revenue & Customs are now contacting these businesses as their 'soft landing' period has ended. Rekeying data manually into an online VAT Return is no longer allowed and all data must be transferred digitally from a software package or spreadsheet.
Making Tax Digital is being extended to all businesses voluntarily registered for VAT from the 1st of April 2022. You can find HM Revenue's notice on MTD for VAT by clicking here.
"MTD for Income Tax self-assessment is coming soon!"
Draft regulations state that all unincorporated businesses or landlords earning more than £10,000 business and property income per year are required to join MTD for Income Tax from April 2023 with the following exceptions:
Trusts, estates, trustees of registered pension schemes and non-resident companies
General partnerships (as defined by the Partnership Act 1890) that earn more than £10,000 per year and have only individuals as partners are required to join MTD from April 2023. All other partnerships are not required to join MTD in April 2023 (examples include those that have corporate partners, Limited Partnerships or Limited Liability Partnerships), but will be required to join MTD at a future date to be confirmed
Quarterly reporting will be required for Making Tax Digital for Income Tax, and the reports are likely to require quarterly totals under headings following the self-employed pages of the self-assessment tax return.
"One thing we do not know for sure is how a taxpayer will be able to report income other than trade and property!"
HM Revenue & Customs are currently assuming that most software being used by the taxpayer will be able to disclose non-MTD income, but in the meantime, HMRC is developing a new service, which will replace the current self-assessment system that will eventually be withdrawn.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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