Back in 2015, the Government laid out their plans for making the process of submitting financial business data digital; Making Tax Digital (MTD). The thinking behind the decision was that it would benefit both businesses and tax agents, making the tax return process more accurate and efficient. With so many businesses now banking and accounting online already, the aim was to bring tax up to date with the way business is done in the 21st century with the hope that all business-related tax would be digital by April 2018. But those were simpler times… keep reading to find out why the government won’t be mandating MTD until 2021.
One word: Brexit! In 2015, the idea for a referendum on Europe was still just that, and even those who thought that Britain might leave the EU if a vote were to happen could not have envisaged the time and administrative effort – not to mention two general elections – it has taken to get to where we now are. All of which has meant that Making Tax Digital (like a number of other government schemes) has been delayed whilst the government negotiates and prepares for Brexit. The latest we are hearing is that the full rollout of MTD will not be in place until April 2021. Here’s what HMRC had to say on the matter:
“The Government further announced in March 2019 that they would focus on supporting businesses to transition, and will therefore not be mandating Making Tax Digital for any new taxes or businesses in 2020.”
Well, the good news is there’s a little more time to prepare for submitting your tax returns digitally. While these changes aren’t too complex, there are a few key things that will need to be considered. The three main changes you should be aware of are:
In short, yes. If you already use us for your tax returns and accounting, then there will be minimal work required at your end. We have been prepared for this change for a long time and have everything in place – from the right software to a comprehensive understanding of the new requirements - to help our clients make the switch when it happens. In essence, it will be business as usual: delegate your accounting tasks to us to make your life easier!
If you don’t currently use an accountant, but are concerned that the new MTD system will take time and effort away from your business, then we’d love to help. Hassle-free accounting is what we do – talk to us to find out what our accountancy services can do for you.