Received email from my accountant - I believe that the MTD will be delayed for some years as these IT projects usually always are delayed for years. However the VAT digital returns in 2019 may be on time. So still some time away, but I thought that I would give everyone a heads up.
What does Making Tax Digital (MTD) involve?
All affected businesses and landlords will need to start reporting their total income and expenses quarterly to HMRC. This will have to be done digitally, which means using accounting software or a suitable app.
These quarterly reports will have to be completed within one calendar month of the end of each quarter. There will then be a final return within 10 months of the year end which will enable corrections to be made to submissions during the year.
Who is affected and when?
Sole Traders and Partnerships
If sales are less than £10,000 per year, then these rules will not apply at all.
If sales are between £10,000 and £85,000 per year (the VAT registration threshold), then MTD will start for any accounting period starting after 5th April 2019.
If sales are over £85,000 per year, then MTD will start for any accounting period starting after 5th April 2018.
As a result of these rules, we will be recommending that any clients with 5th April accounting year ends change their year ends to 31st March. This will delay the start date of MTD by 12 months, which will be a major administrative saving and also provide more time to prepare for these changes.
The rules are exactly the same as above for landlords, except that the option of changing the year end to 31st March is not available. This effectively means that large landlords will be among the first clients to be brought into MTD in April 2018.
All companies will be brought into MTD from April 2020 - there does not appear to be any exemption for small companies in this.
All VAT returns will have to be submitted directly from accounting software from April 2019, rather than by using HMRC online systems (which will cease to be available).