Budget 2017 – Making Tax Digital

The previously announced “Making Tax Digital”, which will fundamentally change the way taxpayers report their income/expenditure to HMRC is due to be introduced in April 2018.

The system will require taxpayers to report their income/expenditure on a quarterly basis by using their own secure online digital tax account.  The idea is that the tax system operates much more closely to real time and there will be less risk of errors in the system, which reportedly cost the government over £8 billion a year.

A welcome delay was announced today however, for smaller businesses who will now have a further twelve months to prepare for quarterly reporting under “Making Tax Digital”.

Previously all unincorporated businesses with turnover over £10,000 were to be required to use the digital service from April 2018.

A twelve month delay for those businesses with turnover under the VAT threshold will be very welcome news for many smaller businesses, who will now not be required to use the digital service until April 2019.

The introduction dates are now as follows:

April 2018

Unincorporated businesses and landlords with turnover in excess of the VAT threshold

April 2019

Unincorporated businesses and landlords with turnover below the VAT threshold

April 2020

All incorporated businesses and landlords

Businesses and landlords with turnover under £10,000 are exempt from these requirements, however those in employment who have secondary income of more than £10,000 per year will not benefit from this exemption.

If you would like to discuss your options and prepare for “Making Tax Digital”, please get in touch with your usual contact.

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Jan 23

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Dodd & Co have been our accountants for over 18 years since first setting up our farming partnership business. We deal with Andrew Sims and have always found his knowledge and advice to be second to none and his service quick and efficient. The sound advice we have received over the years has been invaluable in allowing us to grow our business, refinance and make the most of the assets we own. On top of this Andrew’s advice has also been key in keeping our tax bill to a minimum. The work carried out by Dodd & Co has literally saved the family £1,000’s. We would have no hesitation in recommending Dodd & Co.
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