Making Tax Digital (MTD) Delayed
As we said last week uncertainty and change are in the air!
So, this week we have more changes to announce. MTD for self-employed, partnerships and landlords has now been delayed.
The change that was originally set to become law in April 2023 has now been pushed back due to Covid, the government “recognises the challenges faced by many UK businesses”.
By pushing the date back by a year, more time will be gained by businesses and accountants to adapt to change, and it will also provide HM Revenue & Customs (HMRC) with more time for rigorous testing of the system.
The revised timetable is as follows:
- VAT for voluntarily registered businesses – April 2022
- Self-employed & Landlords – April 2024
- Partnerships – April 2025
- Companies – April 2026
Two things to note, firstly if your Partnerships is a “complex” one such as LLP’s the date will be confirmed in due course.
Secondly if your annual turnover is less than £10,000 you will not be in caught by MTD.
Two further delays
- There has also been a delay announced for the changes to the basis period for assessment and the new penalty regimes. Both will also be delayed until 2024.
- The changes to the basis period is an attempt by the government to align your accounting period for the preparation of your yearend accounts with the tax year.
A lot of businesses with a yearend of 31st March are already aligned with the tax year of 5th April.
The main aim of this exercise is to prepare the business to pay tax on a quarterly basis once the quarterly filing is sorted under MTD.
A new penalty system was to be introduced which would be a point-based system but this has now been delayed, for Income Tax until 2024.
VAT businesses are already subject to MTD. If you are voluntarily registered for VAT(because your turnover is less than £85K MTD will apply to you from 2022.
Therefore, the new penalty regime will be introduced for all VAT Returns from April 2022.
What happens next?
MTD is the government led mandatory requirement for you to adopt a digital or cloud-based solution for your accounting function.
Based does it have to be that way?
Do you have to be pushed into adopting cloud technology by the government?
Or this there another way?
Adopting cloud accounting now will allow you to stay ahead of the curve. It will buy you time to do things your way and at your pace.
How would you feel if you could see your finances including your bank balance on your phone, tablet, or laptop whenever you want?
Would that make you feel a bit safe? Would you be able to plan better if cash became tight.
Now imagine if your accountant could see those figures at the same time as you and not just once a year. Would you feel better knowing that your Accountant will foresee any potential problems and call you?
And think about how you would feel if you did not have spend time each weekend or even worse a whole weekend or two when the tax return is due completing spreadsheets and searching for receipts.
Adopting cloud software is not laborious or expensive.
We have years of experience in this area and our team is fully trained to help you whenever you need.
We will train you, show you the best way to work and even correct your errors. Because face it, change does not happen overnight. It takes time.
So don’t wait until HMRC pushes you to change, take small steps now. Equip yourself to make better business decisions now.
To start your cloud journey contact your normal manager at Myers Clark or if you are not yet a client, please contact Priya at firstname.lastname@example.org