The government has recently issued more information concerning their “Making Tax Digital” (“MTD”) proposals. These details include a number of concessions, although crucially not on the contentious matter of quarterly reporting.
Firstly, the government now proposes to exempt small unincorporated businesses with a turnover of less than £10,000 per annum. It is estimated that this take 1.3m people out of MTD.
Secondly, it is proposed to delay the introduction of MTD for a further group of slightly larger businesses from 2018 to 2019, although they have not yet stated the exact thresholds for this concession.
These concessions were contained in a series of six consultation papers which cover a number of topics, including:
- Bringing tax into the digital age
- Simplifying tax for unincorporated businesses
- The introduction of a simplified cash basis for unincorporated property businesses
- The introduction of a voluntary “Pay As You Go” system
- Making better use of information received from third parties.
The aim remains that of starting the transition to digital reporting in 2018, and seeing the end of the annual tax return by 2020.
Not surprisingly, the government expect these changes to bring in an additional £1b in taxation.
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