The Financial Secretary to the Treasury made a key announcement on Tuesday 28th July concerning their long-term plans for tax administration reform, including timing details on the extension of the Making Tax Digital programme to taxes other than VAT.
According to the announcement, the Treasury plans to impose new regulations on businesses and landlords within Income Tax Self-Assessment, to bring them within the Making Tax Digital for Income Tax regime from April 2023. HMRC are currently running a pilot scheme which will be expanded from April 2021 to allow taxpayers to test the full end-to-end service.
Before this announcement, taxpayers were preparing for Making Tax Digital for Income Tax on the basis of previous Government advice that compliance with the new rules would not become mandatory before April 2021. Given the disruption to taxpayers and practices caused by COVID-19, the news that the rules will not be in force before April 2023 is very welcome, allowing taxpayers and their advisers more time to establish procedures and adopt new software solutions to assist with the increased compliance burden.
Making Tax Digital compliance is a critical matter for UK tax practitioners. Here at CaseWare UK we are following HMRC’s MTD roadmap closely to develop an intelligent solution for Making Tax Digital for Income Tax that integrates with our Cloud suite.
Look out for more information from us about participation in the open beta for the Self-Assessment part of our cloud-based UK Personal Tax solution, which is moving out of its closed beta phase soon.
The full text of the announcement, including policy changes regarding business rates revaluations, tax avoidance schemes and Enterprise Management Incentive schemes is available on the UK Parliament website here.
A consultation has been announced for the autumn concerning the extension of Making Tax Digital to Corporation Tax on incorporated businesses.