Back in July the government announced its plans for the finance bill and confirmed a new timetable for MTD. The latest thresholds, reporting requirements and dates are shown in this table.
|Annual business turnover
||Quarterly reporting required for…
||For accounting periods starting on or after…
|Over £85,000 and VAT registered
|Over £85,000 for all businesses and landlords
||Income tax and NI
||April 2020 (or earlier)
|Between £10,000 and £85,000 (exact figures to be confirmed)
|| Income tax and NI
|| April 2020 (or earlier) on a voluntary basis
| Companies and large partnerships
|| Corporation tax
|| April 2020 (or earlier)
The July announcement was welcome because it removed the requirement for smaller businesses to keep digital records and report quarterly. The revised dates also provide a more realistic timetable for the implementation of MTD.
So far, so good. One thing remains clear, the HMRC (and therefore the government) remains committed to digitalisation.
Council tax, Rural Payments, pension forecasts, driving licences, the Child Maintenance Service, passports… central and local government and its agencies are all looking to save money and improve efficiency by transacting business online. Even Defra’s Sheep & Goat Ear Tag Allocation System is now an online service!
The serious point to make here is that although dates and details may have changed, the overall direction of travel is still towards online, digitally connected services. Tax and accounting professionals should be under no illusions about this.
In fact, the practices we have spoken to are keen to keep up the momentum they’ve already developed in the move towards digitalisation. So, if April 2019 feels like a long way off, what should advisors be doing to keep interest levels high?
Raise client awareness
Identify the clients that are going to be affected first. Make sure they are aware of MTD and understand what you’ll be doing to support them.
Prepare your practice
Think about the services you can offer your clients on the back of MTD. How will you sign your clients up to these services? How will you on-board them?
Consider your workflow
Who will be responsible for the different elements of your new MTD processes, such as bookkeeping, quarterly reporting and the end of period submission?
Join HMRC’s MTD pilot
One of the best ways to get ready for MTD is to try it now and the HMRC pilot allows you to do just that.
Here at Wolters Kluwer, with our MTD plans now far advanced, we believe we’re ideally placed to support our customers with the transition to a fully digitalised tax system.
If you’d like to know more about any aspect of Wolters Kluwer’s work on MTD, contact Phil Thornton, Product Manager for Making Tax Digital at email@example.com.