Chancellor confirms HMRC’s Making Tax Digital plan
Chancellor Philip Hammond used his 2018 Budget speech to reaffirm the Government’s implementation plans for Making Tax Digital for VAT-registered businesses in April 2019.
As a reminder Making Tax Digital, or ‘MTD,’ is set to transform the way VAT-registered businesses, including landlords, process their taxes and comes into force from April 2019.
This means that all VAT registered businesses with a turnover in excess of £85,000 will have to report their headline figures to HMRC on a quarterly basis using approved accounting software.
After this date there will be a phased timetable for all other businesses to comply in the same manner, beginning in 2020.
As far as the Budget 2018 question goes, in short the answer is ‘no.’ Nothing has changed with next year’s MTD targets, which remain firmly on schedule. This restates the importance for VAT-registered businesses to get ready for MTD now by looking at how they currently keep accounting records and how they will comply with VAT returns after 1st April 2019.
Remember, your business is already used to producing quarterly VAT returns and this remains the same, the only change is how the information gets to HMRC.
At Elsby & Co we’ve been preparing for MTD over the last year and our team of advisors have been fully trained in cloud accounting to help our clients review their needs before making the switch to digital.
We offer all of the latest expertise in setting up a business tax account, reviewing cloud accounting software that best suits your needs and taking additional precautions to protect information online.
However, be warned. This is new territory for the way many businesses, accountancy firms and even HMRC have been operating for many years.
In other budget-related news, the Chancellor also confirmed plans to introduce a new tax on the UK revenues of digital services companies from 2020. He said ‘established tech giants’ will be targeted rather than start-ups and so this will apply to those organisations with annual global sales of more than £500m
One particularly important budget change was the announcement that a limit will be introduced on the amount of payable tax credit that can be claimed by a company under Research and Development (R&D) tax relief.
This will be set at three times the company's total PAYE and NICs payment for the period and will come into effect for accounting periods beginning on or after 1st April, 2020.
At Elsby & Co we’ve helped many of our clients claim back thousands of pounds in this area and we highly recommend that businesses contact us at the earliest opportunity to see if they have a claim and allow us to prepare the necessary paperwork well in advance of these new restrictions.
For further details call Elsby & Co on 01604 678470 or email firstname.lastname@example.org.
To register for our Cloud Accounting workshops visit http://www.elsbyandco.co.uk/MTD