You are likely to hear mention of this in the media, particularly towards
the end of 2017 as the first deadline approaches.
By April 2020 HMRC will expect all businesses with a turnover in excess of £10,000pa to be reporting quarterly online returns, moving away from the annual tax return.
At this stage we're still gathering the facts, but HMRC will provide free basic software suitable for the smallest businesses. All the accounting software suppliers are also gearing up their applications to accommodate HMRC requirements. Businesses already using bookkeeping software have an advantage since their information is kept digitally already. Every transaction has to be entered individually and no summaries are allowed, so the use of online systems and mobile apps will help the input of the transactions.
We’re still waiting on information from HMRC about how much information will be required in each of the submissions. Many small businesses are already operating to a quarterly deadline because of VAT returns, so they will be well placed to submit a quarterly income tax return at a similar time.
It’s important that all businesses keep their records up to date but this is more difficult than it sounds due to fluctuating work pressures and the impact of personal situations. From the implementation of MTD it will be absolutely essential to meet the requirements each quarter or face penalties for not doing so.
Naturally there will be penalties for late submission and the rules around this are still being under consultation. The proposals are for no immediate penalties, but greater penalties the more late submissions occur.
HMRC announced an updated Making Tax Digital timetable this June, due to feedback and concerns voiced by various bodies.
These are the updated implementation dates for various types of businesses:
If you are using manual records then you will need to change to digital recording, this could be a spreadsheet but it must be connected to the HMRC system once it is available. You can move to HMRC's new system or a commercial online bookkeeping system. Whichever you choose it will need to be suitable for your business and be in place in time to meet your reporting deadlines. Remember we offer training in several Bookkeeping system s, aimed at all different types of businesses. So get in touch and we can arrange a time to discuss your options.
Take note of your deadline above and plan any systems or routine changes well in advance. One year ahead would be ideal so that you are familiar with your new system before you have to deal with the requirements of MTD.
If you are already using accounting software then your provider should be communicating with you about their readiness for MTD. You may need to change your routines to accommodate quarterly updates in line with the deadlines. Ensure you can achieve these by implementing one year ahead.
If you need help with any of the above then please get in touch. We can recommend software for you to use if you wish to do your reporting yourself, alternatively we can take over your bookkeeping and you can leave the hard work up to us! Call us for a chat: 01273 882200
All details above were correct at the time of publishing - for more up to date information please
get in touch
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