Making Tax Digital: Consultation Phase
It is almost a year and a half since George Osbourne’s 2015 Spring budget, famous for heralding the ‘death of the tax return’. Since then, various pieces of information on to how this might work have emerged, each with varying degrees of certainty but yet little is set in stone.
HMRC however, have now launched an official consultation period; having recently released six separate consultation documents (running to 243 pages in total) explaining how they intend to approach this. see link: www.gov.uk/government/collections/making-tax-digital-consultations
When does this happen?
One element which HMRC appear to have agreed is the date when this all changes: from April 2018. That puts us at the mid-point between initial announcement and implementation, with only around 18 more months before the new system is live.
What are the changes? What does it mean to me?
The scope of the reforms are huge. While all those currently in Self Assessment can expect to see fairly major differences, if you are self-employed or a landlord, then you will have to make the biggest adjustments in order to remain compliant.
The new system demands quarterly online submissions be made, with only one month in which to make them. In many cases, you will be leaving the Self-Assessment system where you have made one annual tax return, and will now be making online submissions each quarter followed by a fifth finalising submission at the year end.
Companies have a stay of execution for a couple of years, but it is expected they will need to comply with the quarterly filing requirements by April 2020.
What are we doing?
We will ensure all our clients are kept up to date with the most important developments on the Making Tax Digital proposals. We will be setting up a dedicated area of our website to keep all the latest developments in one place. Please check back soon to see this.