The Government’s newly-announced timetable for the radical Making Tax Digital (MTD) changes has been welcomed by a West Country financial expert.
WELCOMED DECISION: Julian Smith, Tax Partner with PKF Francis Clark
Concerns about the pace and scale of change contained in the proposals have led to an HMRC rethink to ensure businesses have plenty of time to adapt.
This follows months of uncertainty as to whether the initial plans and timetable for MTD, as announced in the Spring Budget, would be implemented.
Julian Smith, Tax Partner at leading accountancy firm PKF Francis Clark, said: “Thankfully, the Government has listened to the many representations from professional bodies, the Treasury select committee and agents and has set out a new MTD timetable.
“There is a state of relief that eventually HMRC has seen sense. The changes announced give businesses and the accountancy profession a workable time frame for implementation.
“There also appear to be some sensible concessions which will benefit smaller businesses, many of which exist in Cornwall, Devon, Somerset, Wiltshire, Dorset and Hampshire.”
HMRC’s plans are aimed at making it easier for individuals and businesses to get their tax right and keep on top of their affairs – while modernising the tax system to make it more effective, more efficient and easier for customers to comply.
The proposed changes will now mean that:
- Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes
- They will only need to do so from 2019
- Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020
- MTD will be available on a voluntary basis for the smallest businesses, and for other taxes.
Mr Smith added: “This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.
“As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.
“All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.”
Mr Smith said the firm had been hoping for a deferral to allow it to carry out an orderly approach to getting clients MTD compliant. The future for record keeping is definitely digital.
“Many businesses, large and small, will see great advantages from moving to cloud based accounting systems – and to that extent we at PKF Francis Clark have a dedicated cloud accounting team that is here to help,” he said.
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About PKF Francis Clark
Chartered accountants and business advisers PKF Francis Clark has annual revenue of £38 million, a team of more than 600 people and 58 partners. Founded in 1919, the award-winning firm has eight offices across Cornwall, Devon, Dorset, Hampshire, Somerset and Wiltshire. PKF Francis Clark is a member of PKF UKI which is ranked 11th in the Accountancy Age 2016 survey of top accountancy firms.
