“Making Tax Digital (MTD) appears to be full steam ahead despite no workable technology or even exact criteria about who it applies to when,” said Tina Riches, national tax partner at Smith & Williamson, the accountancy, investment management and tax group.
The self-employed, landlords and small to medium sized partnerships were due to start digitally reporting their income and expenses to HMRC on a quarterly basis from April 2018. However, the Chancellor has delighted many people by announcing that smaller businesses now be given a 12 month deferral if their turnover is below the VAT threshold (£85,000 from April 2017).
This results in many businesses having an additional 12 months, until April 2019, to prepare for the changed ahead. For those with turnover above the VAT threshold, they will still go digital from April 2018.
“It is great news that many individuals and businesses and their agents have been given an extra year to prepare for MTD. However, we it must not be understated how concerned other businesses and landlords are about the transition to MTD, without a full cycle of piloting. We would suggest that Philip Hammond should consider delaying the mandatory application of MTD for everyone for a further year at least to allow everyone to fully embrace how it will work.
“We think the Chancellor has missed an opportunity to better clarify the business landscape for the coming years,” says Tina, “There seems to be no clear plan as to the development of MTD. Every announcement we hear more changes, which raise more questions. Although a pilot has started, most larger agents that deal with a large proportion of affected taxpayers won’t be able to join the system for some months and it is still unclear exactly how it will work. In addition, we are still waiting to hear if the exemption for those with turnover under £10,000 is to be raised.”
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.