DIGITAL REPORTING DELAYED FOR SMALLER ENTITIES
Apparently the Government is committed to the "Making Tax Digital" (MTD) project which is scheduled to start in April 2018 with the first quarterly updates being submitted by the self-employed and property landlords in July 2018.
Many professional advisors and the Treasury select committee had expressed concerns about the ludicrous timescale for the introduction of MTD and in the Budget the Chancellor announced that there will be a one year deferral in the start date to 2019 for self-employed businesses and property landlords with gross income below the VAT registration limit.
We are currently advising clients of the best software for them to use to comply with the MTD demands. We expect there to be some basic and cost effective entries to the market for people with buy to lets. This will be a whole new experience of many landlords who at generally don’t use any software for keeping their records. If you would like to discuss how you will be effected by these changes to landlords and rental properties, please contact the office.
CHANGING YOUR ACCOUNTING DATE CAN ALSO DELAY THE START OF DIGITAL REPORTING
A potential way of delaying the start of Making Tax Digital (MTD) would be to change the year end of your business. The legislation in the latest Finance Bill specifies that MTD will apply to accounting periods commencing on or after 6 April 2018.
This means that if you currently prepare accounts to 30 April then the first quarterly update to be submitted to HMRC will be for the period to 31 July 2018. However, if you changed the accounting date of your business to 31 March then the first quarterly update would be for the period from 1 April to 30 June 2019.
Contact us to discuss the full tax implications of such an action.