… or Making Tax Difficult as I prefer to call it !
The government has back-tracked on their original proposal to digitise taxpayers’ affairs. The original plan, to have most self-employed traders and landlords uploading accounts and VAT data from April 2018, was scrapped.
The new plan, delayed until April 2019, requires traders registered for VAT, and with turnover above the current £85,000 registration threshold, to upload their VAT figures digitally direct from a HMRC software interface. HMRC has offered, somewhat tongue in cheek, that taxpayers not required under these revised criteria, are non-the-less welcome to upload their VAT numbers this way on a voluntary basis !
The outcome of these changes requires affected businesses to use compatible software – to link with HMRC – from April 2019.
Those VAT traders who are still using a manual record-keeping process, or IT solutions that will not be recognised by HMRC’s systems, will need to upgrade to more suitable software during the next year.
Clients and other VAT registered business owners that are concerned about their readiness for these changes should call for advice.
It remains likely that all other businesses / Self Assessment taxpayers will be required to move to quarterly returns of income and expenses for Income Tax/NI/Corporation Tax but, at this stage, HMRC have said ‘businesses will not be asked to keep digital records, or update HMRC quarterly, for other taxes until at least 2020’ – we know no more at this stage – some communications seem to suggest 2020 or 2021, others a longer timescale.
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David K Crossley CTA, ATT
Member of the Chartered Institute of Taxation