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Making Tax Digital Update

Last updated on April 4th, 2022 at 12:41 pm

Making Tax Digital (MTD) is the most fundamental change to the administration of the tax system for at least 20 years. This change might seem daunting, but we’ve compiled everything you need to know so your journey into digital tax recording is as easy going as possible.

Making Tax Digital for VAT

All VAT-registered businesses from April 2022 are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns, this applies to all businesses who were previously below the £85,000 threshold.

Making Tax Digital for Income Tax

Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for Making Tax Digital for Income Tax from 6 April 2024.

Some businesses and agents are already keeping digital records and providing updates to HMRC as part of a live pilot to test and develop the Making Tax Digital service for Income Tax. If you are a self-employed business or landlord you can voluntarily use software to keep business records digitally and send Income Tax updates to HMRC instead of filing a Self-Assessment tax return.

Making Tax Digital for Corporation Tax

The government has published a consultation on the future design of Making Tax Digital for Corporation Tax and welcomes views from companies and other organisations within the charge to Corporation Tax, agents, professional bodies and software developers.

The government will provide businesses with an opportunity to take part in a pilot for Making Tax Digital for Corporation Tax and will not mandate its usage before 2026.

What do I need to know now?

All VAT registered businesses who have not yet signed up for Making Tax Digital for VAT need to do so, to ensure a smooth transition to the new digital accounting recording requirements.

  • Consider whether your business qualifies for a digital exclusion exemption.
  • If you’re currently using accounting software, you’ll need to upgrade it to comply with the upcoming requirements.
  • If you’re currently keeping your records on a spreadsheet, you’ll need to obtain software that will allow returns and updates to be made directly from the spreadsheets. This is not yet available and there are no details of who will be supplying this or when.
  • If you’re currently keeping paper records, you’ll need to acquire and initiate the use of the appropriate software

What are the exemptions?

  • Those who are not able to engage digitally due to age, disability, location (e.g. no access to broadband) or religious reasons.

 

Burgess Hodgson can support your business through these changes and provide you with the services that you need for a smooth-sailing transition into MTD. For more information on how we can help contact bookkeeping@burgesshodgson.co.uk or call us on 01227 454627

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Making Tax Digital for Income Tax and the change in the basis period delayed by a year

The introduction of Making Tax Digital (MTD) for income tax and the proposed change in the basis period will be postponed by a year until 2024.

For more information please visit: HMRC policy paper, Customer costs and benefits for Making Tax Digital

Please contact us if you have any questions: info@burgesshodgson.co.uk

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New Health and Social Care Tax

Posted: 07 September 2021

The Prime Minister has outlined a health and social care tax to pay for reforms.

The new tax starts as a 1.25% rise in National Insurance (NI) from April 2022, becoming a separate tax on earned income from 2023.

View more on this here: https://www.gov.uk/government/publications/build-back-better-our-plan-for-health-and-social-care

If you have any questions please contact us at info@burgesshodgson.co.uk

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HMRC to start moving to new IT system

Posted: 24 June 2021

HMRC plans to move taxpayer accounts to a new IT system. They intend to implement these changes from July, till September 2021. This change will affect:

  • VAT-registered businesses that are not signed up to Making Tax Digital, i.e. mainly voluntary registrations; and
  • businesses that pay their VAT bills by direct debit.

HMRC are required by banking regulations compliance to inform businesses paying by direct debit of the amount and payment date before the payment is taken. HMRC will do this via email only to accommodate the short time frame between the return due date and the payment date.  This means that businesses are at risk of late payments as any direct debits will be cancelled if there is no email address on record.

We would encourage businesses to log in to their business tax account to ensure there is a valid and updated email address on record.

If you have any queries on this please contact us at info@burgesshodgson.co.uk

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Taxation of Cryptocurrencies

Posted: 17 May 2021

Cryptocurrencies have become well publicised once again, having grabbed plenty of media attention during the bull run in 2017, with Bitcoin rising to around $19,800. Throughout 2021, Bitcoin has continued to record all-time highs, with the greatest price being recorded on 13 April in excess of $63,000 per bitcoin. (more…)

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Self-Employment Income Support Scheme – Fourth Grant

Posted: 16 April 2021

HMRC have announced they will be contacting eligible taxpayers, either by email or through the online service, to notify them that they can apply for the fourth Self-Employment Income Support Scheme (SEISS) grant to cover the period 1 February 2021 – 30 April 2021.

No definitive date has been set for this, although HMRC have indicated that they will be contacting taxpayers from mid-April, with the deadline for claims being 1 June 2021.

For further information please see the following link: https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

A fifth and, most likely, final grant will be issued later in the year to cover the period 1 May 2021 – 30 September 2021.

Burgess Hodgson will be contacting clients that we believe are eligible for the fourth grant. If you have any queries in the meantime please contact your usual tax adviser or email tax@burgesshodgson.co.uk

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SEISS Grant – HMRC Email

Posted: 19 March 2021

HMRC sent an email on 26 February 2021 to a number of self-employed traders, asking them to prove they are still trading before they can claim the 4th and 5th SEISS grants.

The deadline for response is Monday 22 March.

(more…)

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Tax Tables 2021-22

Click here to download our free and useful tax tables for tax year 2021-2022

 

If you need help with your tax or have any questions please get in touch with our tax team at tax@burgesshodgson.co.uk

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Fourth SEISS Grant

HMRC will be carrying out pre-verification checks on individuals who started self-employment in 2019/20 and may be eligible to claim the 4th grant under the Self Employed Income Support Scheme (SEISS).

Read and download more information here: Fourth SEISS Grant.

If you have any questions, please contact your personal tax advisor within Burgess Hodgson or email: tax@burgesshodgson.co.uk

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Tax Update- Land Disposal Returns

New legislation introduced means that any UK resident selling an interest in residential property which gives rise to a tax liability will have to submit a new Capital Gains Tax Return.

Read more here: Important Tax Update- Land Disposal Returns 2021

 

If you are unsure or would like to discuss a potential tax charge, please contact tax@burgesshodgson.co.uk

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