Making Tax Digital - A Brief Update

Making Tax Digital (MTD) has been in the news a lot lately, and is fast approaching from April 2018 onwards.

HMRC will, without exception or compromise, start rolling out mandatory quarterly digital reporting for all businesses and individuals with an income in excess of £10,000.

Testing is now beginning with various software providers to see how integrated the scheme can be and this will allow HMRC to understand and (hopefully) iron out any issues by the time this comes into force.

The main timeline shows that non-VAT registered self-employed businesses and landlords with an accounting period starting after April 2018 will be the first updates required.

All VAT-registered businesses will be brought in from April 2019 and companies from April 2020.

However, it was thought that the reporting required under MTD would have to come solely from accounting software, but HMRC have now U-turned on this and are going to allow spreadsheets to be used for data recording. Whether this will prove beneficial or not to the digital era will be a story for another time!

MTD is coming whether businesses like it or not, and the sooner that people embrace the change the quicker they can get used to the new style of reporting to HMRC. We are now working on moving the rest of our client-base over to cloud systems such as Xero, with over 75% already moved over.

The problem will come with not being adequately prepared when the change does hit businesses and that is what needs to be implemented beforehand.

Julian Day