BTCSoftware welcomes Making Tax Digital delay
The BTCSoftware team has welcomed the Government’s announcement of a delay to the implementation of Making Tax Digital (MTD).
Under the new timetable, from 2019 businesses will have to keep digital records only for VAT reporting purposes and only if their turnover is above the VAT threshold. Businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system on a voluntary basis. In addition, quarterly HMRC updates and digital records will not be required at least until 2020.
This delay gives additional time to prepare for MTD, which will benefit accountancy practices and their clients as well as third party software developers, who need to perfect the technology behind the Digital Tax Return.
Days before the announcement of the delay, HMRC’s Digital Team had sent out a roadmap that mapped out when they planned to deliver the APIs (the application programme interfaces, which enable data to effectively go through HMRC’s portal from third party software) to third party software developers such as BTC.
According to Rob Ellis, CEO of BTCSoftware, the plan was too ambitious and didn’t answer all the key questions: “It didn’t answer the big question about the time scale, which has now been delayed. And it didn’t answer one of the things we’ve been asking for a long time, which is how does the tax return come together in one item.”
HMRC’s crystallisation API was supposed to bring together other elements of income into self-assessment. “Over the past weeks, we have been pressing HMRC to explain how income streams such as Capital Gains, Trust, etc., and tax return pertinent information such as non-residence, etc. is being incorporated into the new Digital Tax Return regime in order to give the tax payer a complete tax picture.”
Rob Ellis was pleased HMRC had responded to the accounting community’s calls for a delay: “There was never anything to bring the whole picture together. The roadmap talks about the crystallisation API, but at present is only catering for dividends and savings income. This delay is welcome from that point of view.” However, he expressed his surprise about the announcement of the new voluntary basis of MTD as well as the length of the delay. “It is at least a two-year delay, so maybe they are going to take time to have a complete rethink” said Ellis.
Visit BTCSoftware’s website for more information about MTD.