As the UK Parliament prepares to go on it’s summer recess the treasury has released numerous policy papers and reviews that set out the agenda for the Autumn Budget and the Finance Bill 2020/21.
Making Tax Digital (MTD)
The rollout of this digital evolution in the way tax is reported and paid was impacted by the Coronavirus crisis. It seems clear that the project is back with renewed emphasis and justification. The view of the government is that more real-time tax information would have allowed more targeted and accurate support for the self-employed in the recent crisis.
The COVID-19 pandemic… highlighted the need for a more flexible, resilient and responsive tax system that provides businesses and HMRC with more up-to-date information on businesses and their finances, and enables easier identification and better targeting of taxpayer support.Jesse Norman, Financial secretary to the Treasury
New Key Dates
In a written statement accompanying draft legislation, the secretary laid out the renewed timetable for the Making Tax Digital initiative…
- Since April 2019 businesses above the VAT threshold have been obligated to keep VAT records digitally and submit them to HMRC via software.
- April 2022 – all VAT registered businesses (those under £85k) will be included. 30% of those under the threshold have already opted-in.
- April 2023 – scheme will be extended to Income Tax for businesses and landlords operating under Self Assessment.
- Beyond – next on the list will be Corporation Tax. The government announced it would start to explore this in the Autumn.
What this means for you
Since the Making Tax Digital initiative was launched we have been very vocal in raising awareness of the impact that this evolution of tax will have on business owners. It is arguably the biggest change to the tax system since the introduction of PAYE in 1944 and paves the way for authorities to view what is going on in your business in near real-time.
Be prepared to not only keep up with new technology but also reap the rewards that having online accounting can bring to your business. As Xero Platinum Partners and experts in online accounting systems we are your ally in changing times.
Other hot topics
The government also set released a raft of documents to set out the policy agenda for the Autumn Budget. This included…
- Business rates review – next revaluation postponed until 1 April 2023. So that it better reflects the impact of COVID19, it will be based on property values as of 1 April 2021.
- Stamp duty consultation on charge for non-UK residents
- Tackling promoters of tax avoidance – tougher measures to tackle those who promote and market tax avoidance schemes.
- Consultation on whether qualifying R&D tax credit costs should include investments in data and cloud computing
- Consultation on the Economic Crime Levy
- Call for evidence on pensions tax administration
- Carbon emissions tax consultation – how should it be designed?
- National insurance contributions holiday for employers of veterans