By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants. This column appears in the Pembrokeshire Herald, Carmarthen Herald and Llanelli Herald.
The taxman at HMRC has published further information on Making Tax Digital for VAT (MTDfV).
The VAT notice sets out some further details of the MTDfV regime, which will ultimately require taxpayers to move to a fully digital tax system.
Under the rules, businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to keep digital records for VAT purposes using ‘functional compatible software’ and provide their VAT return information to HMRC via an application programming interface.
This notice explains:
- the digital records businesses must keep and the ways to record transactions digitally in certain special circumstances
- what counts as ‘functional compatible software’, and when software programs do and do not need to be digitally linked where a combination of programs is used.
The new rules have effect from 1 April 2019, where a taxpayer has a ‘prescribed accounting period’ which begins on that date, and otherwise from the first day of a taxpayer’s first prescribed accounting period beginning after 1 April 2019.
Please contact the team at Clay Shaw Butler for advice and support on the introduction of MTDfV.
Internet link for more information on the Government website –
https://www.gov.uk/government/news/hmrc-publishes-more-information-on-making-tax-digital
Meanwhile, the Government has published draft legislation for Finance Bill 2018-19 which is currently open for consultation, and ‘continues the Government’s commitment to a competitive and fair tax system’.
The draft legislation could affect a range of taxes, from Stamp Duty Land Tax (SDLT) to income tax.
The draft legislation also outlines the Government’s approach to the Making Tax Digital (MTD) penalty system, with HMRC outlining its intention to utilise a two-tier penalty model for businesses and individuals who fail to pay their tax on time.
The July publication of the Finance Bill 2018-19 draft legislation forms part of the government’s new fiscal timetable.
The consultation on the draft legislation will run until 31 August 2018.
The final contents of ‘Finance Bill 2018-19’ will be subject to confirmation at Budget 2018, expected later this year in November.
We will keep you informed of developments in future Money Matters columns in the Herald newspapers.
Internet link for more information on the Government website –
https://www.gov.uk/government/collections/finance-bill-2018-19
Finally, you are all probably well aware of the latest interest rate news. But, just in case you are not fully up to speed . . .
The Bank of England has raised the interest rate from 0.5% to 0.75%.
The quarter of a percentage point rise sets the rate at its highest level since March 2009.
The rise in the interest rate will no doubt increase the interest costs of residential mortgages that have variable or tracker rates.
It will be interesting to see if the rise in the rate is passed on to savers.
In response to the increase in the rate, Alpesh Paleja, CBI (Confederation of British Industry) Principal Economist, said:
“This decision was in line with our expectations. The case for another rate rise has been building, with inflationary pressures being stoked by a tight labour market and many indicators now suggesting that weak activity in the first quarter of 2018 was a blip.
“The Monetary Policy Committee has signalled further rate rises over the next few years, if the economy evolves as they expect.
“These are likely to be very slow and limited, particularly over the next year as uncertainty around Brexit takes its toll on business investment.”
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) –
http://www.clayshawbutler.com/news/latest-news-for-business
We have a strong and experienced team with great local knowledge all geared-up to helping you get the very best from your finances – whether that is as an individual or as a business.
We stay ahead of the game by putting great store by continual professional development for our staff.
With Investors In People status at Clay Shaw Butler, we care passionately about making sure our staff have all the tools they need to serve you, our customers.
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The team at Clay Shaw Butler can be contacted on 01267 228500.
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