Making Tax Digital: Prepare or man the barricades!
HM Revenue & Customs have just published their second webinar on their Making Tax Digital (MTD) project, including a plethora of questions and answers. While the tone was very touchy-feely, as the presenters talked about the HMRC’s “customers”, the underlying iron fist could clearly be sensed:
- Yes, there will be some businesses that avoid the requirements, principally those with an annual turnover of less than £10,000. If your turnover is greater than that, you are in.
- No Internet connectivity? Okay, you will not have to make quarterly submissions.
- Connectivity but no computer? Tough, you are in.
- Over 60? So what, you’re in.
- And so on.
- How will adherence to the new regime be imposed? By a new points-based penalty system. There’s a surprise.
It was admitted that the Brexit vote delayed the launch of the consultation period which, it was stated, HMRC were anxious not to shorten. A cynic might suspect that MTD is preordained and nothing short of insurrection will cause more than a little fraying at the edges of the proposals. So be warned. In 18 months time you will need to have a computerised bookkeeping system and be ready to submit quarterly data to HMRC – or be manning the barricades!
Cloud accounting packages represent the optimal way to address these issues but it would be unwise to put off their adoption until the last minute. If you are a sole trader or partnership or receive gross rental income of over £10,000, speak to one of our advisers about the changes and your options now.