Remember 2015? Star Wars Episode VII – The Force Awakens was finally released, as was Adele’s ‘25’ album, the Coalition government came to an end and the Brexit Referendum had yet to be announced.
2015 was also the year that the government first began to talk about their revolutionary idea ‘Making Tax Digital’ and the first Roadmap was published in December that year.
Since then the timetable has changed numerous times, various elements have been deferred and delayed and it has been difficult to keep up with what’s going on.
So, where are we now? This blog considers the timetable for MTD – who needs to get involved, and when. Separate blogs will look at what businesses and individuals need to do to comply with MTD requirements.
1 April 2019: MTD for VAT
There are a number of ongoing pilots, but the first mandatory record-keeping and filing under MTD begins from 1 April 2019 for VAT registered businesses with a turnover over £85,000.
VAT registered businesses with a turnover less than £85,000, that is those businesses that are voluntarily registered for VAT can join in with MTD, but do not have to.
Businesses that are not VAT registered, and which are not required to be, are exempt from MTD at this point.
It’s worth noting that once you are ‘in’, you stay ‘in’ for as long as you remain VAT registered, even if your turnover subsequently falls below that £85,000 threshold.
There are some businesses that meet the criteria for compulsory MTD which nevertheless do not have to join in from 1 April 2019 but can defer entry until October. These include those using annual schemes or making payments on account, members of VAT groups and not-for-profit organisations which are not set up as a company. HMRC have said that they will write to all those affected to confirm that they are within one of the relevant categories.
1 October 2019
This is the date when those businesses which were eligible to defer entry from 1 April must begin record-keeping and filing under MTD.
1 April 2020: MTD for Income Tax
HMRC’s intention is for individuals and landlords to keep records digitally and make quarterly submissions about income and expenses, ultimately removing the need to submit a self-assessment Tax Return.
Although there are pilot schemes running already, it has been confirmed that MTD for income tax will not be introduced until at least April 2020.
Individuals can already register for access to their Personal Tax Account (PTA) which has information about their PAYE codes, details of employment income and tax deducted at source, full and incomplete years for National Insurance and State Pension projections.
If you have any questions about Making Tax Digital and how you will be affected, please contact me.
Also see Making Tax Digital – What do I need to do?
