Making Tax Digital – what’s the latest?

16 May 2017

With electioneering for the General Election in full swing, where are we now with Making Tax Digital?

The enabling legislation, like 80% of the draft Finance Bill in which it was contained, went in the bin ahead of the dissolution of Parliament rather than being rushed through in a couple of days and without proper parliamentary scrutiny.

But don’t be fooled – that really doesn’t mean much. We already knew we’d be awaiting secondary legislation later in the year to provide the detail of MTD, and so we’re no more in the dark about the regime than we were before the snap election was announced.

Certain parts of the press, and even a number of tax professionals, have suggested that MTD is now not happening. But that’s simply not the case. HMRC are pressing ahead with the phased release of their APIs and taxpayers (admittedly few in number) have begun being enrolled into the pilot regime.

The sensible advice is to continue to expect MTD until (and unless) there is an explicit message from the Treasury to the contrary. The timetable and finer detail might, of course, change. But in one way or another MTD is coming, and taxpayers need to be prepared.

Below is a reminder of the current implementation timetable;

When?
Accounting periods starting after
Who?
5 April 2017 400,000 volunteers for the beta testing.
5 April 2018 Those with turnover in excess of £85,000 and liable for Income Tax, including:

· Unincorporated businesses;

· LLPs with individuals
amongst their members; and

· Landlords who let out
property.

5 April 2019 Those with turnover in excess of £10,000 and liable for Income Tax, or those registered for VAT, including:

· Unincorporated businesses;

· LLPs with individuals
amongst their members; and

· Landlords who let out
property.

5 April 2020 · Those who pay Corporation Tax

· Partnerships with turnover in excess of £10m

With certain businesses now only ten months from being drawn into the regime, the need to consider your accounting systems and how you’ll accommodate the regime is building.

Why not take a very simple first step, and sign up for one of our free monthly Xero workshops to take a look at some of the cloud packages available to help you remain compliant? Alternatively, feel free to contact me or Adam Fernandes if you have any questions.