Jenny Strudwick
2 minutes length
Posted: 30th March 2017

Bringing business tax into the digital age consultation response from HMRC

Bringing business tax into the digital age consultation response from HMRC

The HMRC consultation for bringing business tax into the digital age contained a lot of proposed changes. HMRC’s response to the consultation was released on 31st January 2017 and although it contained a lot of detail, many questions have been left unanswered. However here are our key takeaways from HMRC’s response:

As a result of the number of responses which expressed a concern for businesses moving away from the use of spreadsheets; HMRC have confirmed that they can continue to use spreadsheets for record keeping. But they will be required to use some sort of software to submit their quarterly submissions to HMRC and that invoices and receipts do not need to be stored digitally.

They also confirmed that they will continue to accept 3 line accounts under MTD for businesses with a turnover below the VAT threshold (currently £83k but being increased to £85k).

Due to the feedback HMRC received from the consultation they have agreed that Charities are exempt from MTD for the time being. They have also deferred Partnerships with a turnover above £10 million until 2020 to coincide with corporation tax.

There was an overwhelming negative response to the initial exemption threshold of £10k and HMRC have stated that this is still under consideration, but a decision on this will have to be made soon.

Interestingly HMRC published an updated impact statement which says that the cost of MTD to businesses will be a one off cost of £280 (average) in the first year and then ongoing annual savings for the following years.

One point in particular that may be cause for concerned was the deadline for end of year activity submission, which is now 10 months after the last day of period of account or 31st January, whichever is sooner. This could mean that where accounting periods are not aligned to the tax year, an individual could have a deadline for submitting their end of year activity prior to the end of the tax year to which that accounting period relates.  

For more online information about MTD, check out our Making Tax Digital Hub, a teeming hive of MTD news, insight, events (including our latest MTD roadshows, held throughout the UK this summer) and dedicated training solutions exclusive to accountants.

If you enjoyed what you just read, you can share this article on TwitterFacebookLinkedIn or elsewhere on the web using the ‘share‘ button at the top right of this article —>