We've had a busy last couple of days at Accountex, and our team had many in depth conversations with attendees about the changes happening in the finance world at the moment. One theme that came through loud and clear was Making Tax Digital – with everyone asking what happens now given the recent announcements? The general election is due to take place Thursday 8th June, but what impact does this have on the roll out?
Over the coming months you will be hearing from many of our Making Tax Digital experts. We thought you might be interested in finding out a bit more about them and what they contribute to our MTD strategies and planning.
There’s been a lot of talk in the professional press recently about the use of spreadsheets for digital record keeping with Making Tax Digital. So what’s the latest on this topic?
As events this week have demonstrated, one of the most intriguing aspects of Making Tax Digital is that the topic continues to evolve and develop. Because of this, no one (least of all software developers!) can rest on their laurels and no practice can yet say that they understand all the implications of MTD and how it will affect the way they service their clients.
Making Tax Digital is the biggest change to tax return compliance since Self-Assessment. Despite this, we know some things with a surprising degree of certainty.
In late January HMRC provided their response to the Making Tax Digital consultation period, with the main news being that Making Tax Digital reporting for businesses will begin in April 2018, as per original plans. Despite concerns around the ambitious pace at which HMRC are implementing the changes, HMRC have chosen to press on due to overwhelming support for the digitisation of tax in the majority of consultation responses, with more than 3000 responses received in total.
HMRC have confirmed that a formal consultation response and draft legislation for Making Tax Digital for Business will be available soon. Having received over 600 written responses to the full consultation, and over 1200 responses to the online survey, HMRC are looking to allow enough time for the consultation responses to be considered carefully and the findings fed into the proposals. They have also indicated an updated impact assessment will be published at the same time. The Government's response to the consultations will be published in January 2017, alongside the draft legislation for Making Tax Digital for Business. While we wait for the response from HMRC, here’s the top 4 key questions we asked of HMRC in our response to the consultation.
We are pleased to confirm that HMRC has today launched six Making Tax Digital (MTD) consultation documents. The MTD Roadmap, published in December 2015, set out the government's plans to deliver a fully digital tax service by 2020. It is widely recognised that the reforms are ambitious and radical and will impact significantly on accountants and their clients. It is important that HMRC consults widely with interested parties to help shape these changes.
When we first started hearing about businesses and landlords having to file quarterly accounts data to HMRC, much was said about the administrative burden on those who currently collect all their scraps of paper and hand them to their accountant to make sense of at the end of the year. There were many taxpayers and their advisers who were untroubled by this announcement, knowing that they kept their accounts in an orderly manner on spreadsheets, using the results to complete their VAT returns on line.
A recap of the options under new UK GAAP.
If you are, or have clients that are “small” companies or LLPs, you might expect to be able to use a revised version of the FRSSE. But this only applies for 2015 year ends.
From 2016 (or earlier if you choose), the new small entities regime is available, embodied in section 1A of FRS 102. This sets out a general exemption for small entities from all of the disclosure requirements of FRS 102, but it then lists a small number of disclosures that are required instead. The resulting accounts would be expected to be much shorter than a full set of FRS 102 accounts, though it’s not a completely easy ride- look out for another post on this soon.