By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants. This Money Matters column appears in the Pembrokeshire Herald, Carmarthenshire Herald and Llanelli Herald.
The taxman at HMRC is working with more than 150 software suppliers who have said they will provide software for Making Tax Digital for VAT (MTDfV) in time for April 2019.
From April 1, 2019, businesses will be mandated to use the MTDfB system to meet their VAT obligations under MTDfV.
Only businesses with a taxable turnover above the VAT threshold (currently £85,000) will be required to use MTDfV.
However, HMRC is piloting the new system, on a small scale, from April 2018.
HMRC has advised that more than 40 suppliers have said they will have software ready during the first phase of the pilot and other software suppliers are expected to follow.
HMRC will open up the pilot to allow more businesses and agents to join later in 2018.
HMRC has advised that the list will be updated as more software meets the criteria.
HMRC are advising businesses to check with their existing software supplier to find out if they will be supplying suitable software.
You can contact the team at Claw Shaw Butler chartered accountants in Carmarthen for help with Making Tax Digital for VAT.
Meanwhile, HMRC is warning that taxpayers could face penalties if they fail to declare their income on foreign assets before new ‘Requirement to Correct’ legislation comes into force.
HMRC is urging UK taxpayers to come forward and declare any foreign income or profits on offshore assets before September 30 to avoid higher tax penalties.
New legislation called ‘Requirement to Correct’ requires UK taxpayers to notify HMRC about any offshore tax liabilities relating to UK income tax, capital gains tax, or inheritance tax.
The most common reasons for declaring offshore tax are in relation to foreign property, investment income and moving money into the UK from abroad.
HMRC has stated that over 17,000 people have already been in contact to notify they have tax due from sources of foreign income, such as their holiday homes and overseas properties.
The Financial Secretary to the Treasury, Mel Stride MP, said:
“Since 2010 we have secured over £2.8bn for our vital public services by tackling offshore tax evaders, and we will continue to relentlessly crack down on those not playing by the rules.
“This new measure will place higher penalties on those who do not contact HMRC and ensure their offshore tax liabilities are correct. I urge anyone affected to get in touch with HMRC now.”
From October 1, more than 100 countries, including the UK, will be able to exchange data on financial accounts under Common Reporting Standard (CRS).
It is expected that the CRS data will significantly enhance HMRC’s ability to detect offshore non-compliance and it is in taxpayers’ interests to correct any non-compliance before that data is received.
Taxpayers can correct their tax liabilities by:
- Using HMRC’s digital disclosure service as part of the Worldwide Disclosure Facility or any other service provided by HMRC as a means of correcting tax non-compliance.
- Telling an officer of HMRC in the course of an enquiry into your affairs.
- Or any other method agreed with HMRC.
Once a taxpayer has notified HMRC of their intention to make a declaration, by the deadline of September 30, they will then have 90 days to make the full disclosure and pay any tax owed.
To ensure there is an incentive for taxpayers to correct any offshore tax non-compliance on or before September 30, there are increased penalties for any failures to correct by that date.
If taxpayers are confident that their tax affairs are in order, then they do not need to worry. However, if you are unsure, please contact the team at Claw Shaw Butler on 01267 228500.
Internet link to the Government website –
https://www.gov.uk/government/news/hmrc-warns-its-time-to-declare-offshore-assets
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.
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The team at Clay Shaw Butler can be contacted on 01267 228500.
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