By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.
Over the coming years, the government plans to phase in its landmark Making Tax Digital (MTD) initiative, which will see taxpayers move to a fully digital tax system.
However, HMRC has shared a statement about how they are prioritising change in the department and as a result some parts of MTD will be delayed.
HMRC has acknowledged the challenges in:
- exiting the EU and
- the ambition to become the world’s most digitally advanced tax authority.
While some of the finer details are still being decided, HMRC have announced that, to achieve the above, some aspects of MTD are to be delayed.
HMRC still plan to go ahead with MTD for VAT from April 2019.
Information on some of the delayed projects is set out below:
Plans to introduce further digital services for individuals
There will be ‘halted progress’ on simple assessment and real-time tax code changes. Additional services in this area will only be added where they reduce phone or post contact or otherwise deliver ‘significant savings’.
Other digitalisation of services affecting fewer individuals
This includes Inheritance Tax payments, Tax Advantaged Venture Capital Schemes applications and PAYE Settlement Agreements
Creation of the single digital account for all businesses
HMRC has confirmed this will now happen at a ‘slower pace’. HMRC has confirmed the single digital account remains an aim of the department and they stress it will not impact the delivery of Making Tax Digital.
Voluntary Making Tax Digital for Business service for income tax
HMRC has confirmed this will continue to be available for any sole trader wishing to make quarterly updates to HMRC.
Mandatory Making Tax Digital for VAT – still ‘on track’
HMRC stated that MTD for VAT is still on track. VAT registered businesses with a turnover in excess of the £85,000 VAT registration threshold, will be required to comply with the requirements of MTD for VAT for all VAT periods commencing on or after 1 April 2019.
In addition, the government has confirmed that, it will not mandate any further MTD for Business changes before 2020, at the earliest.
Internet link: ICAEW (The Institute of Chartered Accountants in England and Wales) blog – https://ion.icaew.com/taxfaculty/b/weblog/posts/hmrc-s-work-programme-to-implement-brexit-and-making-tax-digital-slowed-but-continuing
Meanwhile, with only a couple of weeks until the introduction of the new General Data Protection Regulation (GDPR), the Federation of Small Businesses (FSB) is warning small and medium-sized enterprises (SMEs) that time is running out for them to prepare.
The business group stated that small businesses face an ‘uphill challenge’ in ensuring that they are compliant by the date when GDPR takes effect of 25 May 2018.
Under the new rules, organisations which collect, store and process individuals’ personal data will be subject to new obligations, with an increased emphasis on accountability and transparency.
The financial penalties for failing to comply are severe, with fines costing up to €20 million or up to 4% of total annual worldwide revenue, whichever is the greater.
Mike Cherry, National Chairman of the FSB said:
“As the GDPR deadline swiftly approaches, there is a real danger that many small businesses are yet to have adequately prepared for the changes. Fortunately for these businesses, there is still time on the clock to start, or finish, their preparations.
“The GDPR is the largest shake-up of data protection laws for years, and whether you are a personal trainer or a consultant, most businesses will have to implement changes to their current practices to make sure they are complying with the new rules.”
Further information on the GDPR can be found on the ICO website.
Internet link: FSB press release – https://www.fsb.org.uk/media-centre/press-releases/time-ticking-for-small-businesses-ahead-of-gdpr-deadline
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