Making Tax Digital update

making tax digitalThere was only a passing reference to Making Tax Digital in the Budget. Jane Alsop has written a quick Making Tax Digital update.

To recap on Making Tax Digital (MTD)

First of all back in 2015 HMRC published the ‘Making Tax Digital roadmap’. It announced the governments ambitious plans for digitising the tax system.

Furthermore, in July 2017 legislation was put in place for the first phase, namely that:
From April 2019 all VAT registered businesses will be required to keep their records digitally and to file their quarterly VAT returns electronically with information extracted from their digital records. The digital records should include information taken from business invoices (both sales and purchases). The manner in which records can be kept digitally could vary from spreadsheets to bespoke software.

The next phase

Income tax from businesses, landlords and corporation tax from companies will be the next phase of Making Tax Digital legislation.

These will be filed quarterly (as with VAT returns) with detail taken from the digital records.

The system needs to be shown to work well before the scope of MTD will be widened. In the latest Budget the Chancellor confirmed this would not before April 2020 at the earliest.

Jane Alsop Tax Investigations Adviser

Post by Jane Alsop, Tax Investigations