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Despite being perhaps the most significant change to the UK tax system in decades, Making Tax Digital (MTD) did not receive a single mention from the Chancellor in the Autumn Statement.
But the policy was referenced in the supporting documents, revealing that the government will publish its response to recent consultations in January.
The documents said: “In January 2017, the government will publish its response to the Making Tax Digital consultations and provisions to implement the previously announced changes.”
The government has come under heavy criticism from leading professionals for the lack of firm details which have been made available about how the policy will actually work in practice, particularly for limited companies.
At the moment, we know that businesses will have to report to HM Revenue & Customs (HMRC) on a quarterly basis, but will only have to make a single annual tax payment unless they opt to make quarterly repayments. We also know that businesses that have an annual income of less than £10,000 a year will be exempt from the changes.
Businesses will need to use what are described as ‘designated software packages’ to report to HMRC and this will not include Microsoft Excel. This means that those firms which are not using dedicated accounting software at the moment are likely to need to make the move over to such a package.
If your business does not currently use a dedicated accounting software package, it is likely to prove useful to make the move early.
As further details of the government’s plans for Making Tax Digital emerge, we will keep you informed of all the developments.
Link: Autumn Statement