Following the Chancellor’s Budget statement yesterday I thought it might be helpful to let you have more information about how this affects businesses and landlords who will be required to keep their records digitally and provide quarterly updates to HMRC under Making Tax Digital for Business (MTDfB)
You may already have seen the responses to last year’s Making Tax Digital consultations that we published on 31 January 2017.
Amongst other things, these confirmed that businesses will be able to continue to use spreadsheets for record keeping but their software must be able to interact with those spreadsheets so that the requirements of MTDfB are still met. We also said that those businesses eligible for three line accounts will be able to provide quarterly updates on that basis.
Yesterday’s Budget announcement confirmed that businesses (including the self-employed and landlords) that have annual turnover below the VAT registration threshold will have an extra year before they are required to keep records digitally and send HMRC quarterly updates. This will give 3.1 million small businesses with more time to prepare for Making Tax Digital.
Those with annual turnover above the VAT threshold will still be required to keep digital records and send HMRC quarterly updates from April 2018. The exemption threshold, previously announced, will remain at £10,000.
From April we’ll start our live pilot of the changes with businesses and agents. We’ll start with small numbers but aim to have hundreds of thousands of small businesses and their agents taking part.
We’d really appreciate your help in recruiting any of your clients who may be interested and fit the profile of the sort of business we are looking to help us initially. We’ll be saying more about this in the spring.