‘Making Tax Digital’ regime delayed for 12 months
Chancellor Philip Hammond has delayed the implementation of Making Tax Digital by at least 12 months for small businesses with turnover below the VAT registration threshold at the Spring Budget 2017.
Making Tax Digital is a key component of the Government’s plans to make it easier for individuals and businesses to get their tax right first time and keep on top of the tax they owe.
HM Revenue & Customs (HMRC) will be implement a fully digital tax system, which would require firms and individuals to keep solely digital records of their profits and update them regularly with the tax authority; giving everyone a clearer view of their tax position through the tax year.
The digital reforms will also bring the British tax system in line with what most businesses and individuals now expect from online service providers – an engaging and reliable digital experience.
Plans to implement Making Tax Digital will now be as follows:
April 2018 – if they have profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs) and their turnovers are in excess of the VAT threshold
April 2019 – if they have profits chargeable to Income Tax and pay Class 4 NICs and their turnovers are below the VAT threshold
April 2019 – if they are registered for and pay VAT
April 2020 – if they pay Corporation Tax (CT)
Note: Businesses, self-employed individuals and property landlords with turnovers of less than £10,000 per annum will be exempt from the Making Tax Digital system.
Information provided by Tax Assist