On 31 January 2017, HMRC published their summary of six consultation documents regarding “Making Tax Digital”. Making Tax Digital is part of the Government’s initiative to bring tax into the digital age. During the consultation period, HMRC ran a series of public events throughout the UK to obtain feedback and they received over 1200 responses to the consultation.
After considering the responses, HMRC has confirmed:
• businesses will now be able to continue to use spreadsheets for record keeping, but they must ensure that their spreadsheet meets the necessary requirements of Making Tax Digital for Business – this is likely to involve combining the spreadsheet with software
• businesses eligible for three line accounts will now be able to submit a quarterly update with only three lines of data (income, expenses and profit)
• free software will be available to businesses with the most straightforward affairs
• the requirement to keep digital records does not mean that businesses have to make and store invoices and receipts digitally
• activity at the end of the year must now be concluded and sent either by ten months after the last day of the period of account or 31 January, whichever is sooner
• charities (but not their trading subsidiaries) will not need to keep digital records
• for partnerships with a turnover above £10 million, Making Tax Digital for Business is deferred until 2020.
A copy of HMRC’s consultation summary can be found here.