Making tax digital
Discussion
I've just read that 1 April 2026 was the target date for MTD for Corporation Tax. That was when MTD ITSA was still expected to be 6 April 2024.
So, there is obviously a lot of uncertainty now as to what the implementation date for Corporation Tax is going to be.
And I can tell you that if trying to make MTD work for simple sole traders and landlords is proving difficult, making it work for much more complex limited companies is on another scale of difficulty altogether.
They have already given up on partnerships it seems.
Another area that they couldn't seem to solve was trying to work ot how to deal with rental income on properties where there was more than one landlord - such as jointly or family owned owned properties.
So, there is obviously a lot of uncertainty now as to what the implementation date for Corporation Tax is going to be.
And I can tell you that if trying to make MTD work for simple sole traders and landlords is proving difficult, making it work for much more complex limited companies is on another scale of difficulty altogether.
They have already given up on partnerships it seems.
Another area that they couldn't seem to solve was trying to work ot how to deal with rental income on properties where there was more than one landlord - such as jointly or family owned owned properties.
Eric Mc said:
Watch out for the fact that you will probably end up paying tax on profits that exceed a 12 month period. This always happens when basis periods are changed.
Thanks, I'll ask about that. The previous two years were non-earning & I am reducing the year by 1 month (it used to end on April 30th) but I'll ask what the implications are.A bit of info here, and it mentions overlap relief for affected taxpayers but under the heading 'Changing Accounting Period' it says that if you do it before 2023/24 you won't be able to spread any extra profits that arise so it looks like that has been pushed back a year also, even though it wasn't mentioned in the Budget.
https://www.gov.uk/government/news/how-hmrc-assess...
https://www.gov.uk/government/news/how-hmrc-assess...
Edited by Koyaanisqatsi on Monday 9th January 11:08
Eric Mc said:
The cancellation of the 2024 MTD implementation date was not mentioned in the October Budget either. It was mentioned in a stand-alone statement on 19 December.
We are watching a government that does not know what it is doing.
Arrr maybe that is why Rishi wants us to study maths for longer! Better maths = less mistakes on your tax return / money saved by HMRCWe are watching a government that does not know what it is doing.
There is logic.. you've just got to look really hard for it.
His next initiative 'Bringing back NHS glasses for the self employed'
Koyaanisqatsi said:
And they told us they needed to make this year end basis period change PRECISELY because of Making Tax Digital.Now it's happening anyway even though MTD ITSA has been postponed for at least two additional years.
Do you get the impression they are making it up as they go along?
akirk said:
From what I am reading this doesn’t affect Ltd companies - is that right?
The plan is that it eventually will - but the roll-out of the original idea that it would initially apply to sole traders, partnerships and landlords has proved to be immensely difficult.Original announcement of MTD ITSA - Spring Budget 2015
Initial proposed start date - 6 April 2018
Amended start date - 6 April 2023
Further amended start date - 6 Aptil 2024
Further amended start date - 6 April 2026
Initially MTD would have applied to sole traders, landlords and partnerships. Issues have arisen regarding partnerships and properties where there are multiple landlords. The introduction for the latter situations has now been deferred indefinitely and obviously, MTD for limited comnpanies could now be a long way off.
The problem is that when MTD ITSA does come in in 2026. traditional self assessment returns will still be required for partnerships, the individual partners and for landlords who part own properties with other people. Some people may be returning some of their income under MTD ITSA and other parts of their income under Self Assessment. - all with different submission rules, deadline dates and penalties.
Another unresolved issue is when there are multiple tax agents involved in a situation - such as partnerships or where properties are owned by two or more individuals.
akirk said:
From what I am reading this doesn’t affect Ltd companies - is that right?
Officially not until April 2026 at the earliest, so expect so see that perhaps closer to 2036, or more likely later (not a joke). Nothing to get excited about for a few years yet VAT is the most effective tax collection method therefore so many resources were piled into that project to get it correct.
Koyaanisqatsi said:
akirk said:
From what I am reading this doesn’t affect Ltd companies - is that right?
Officially not until April 2026 at the earliest, so expect so see that perhaps closer to 2036, or more likely later (not a joke). Nothing to get excited about for a few years yet VAT is the most effective tax collection method therefore so many resources were piled into that project to get it correct.
"ITSA" stands for Income Tax Self Assessment.
The ICAEW has written to HMRC "calling on them to either drop or postpone quarterly reporting as part of the eventual rollout of Making Tax Digital for income tax self assessment (MTD ITSA), describing the administrative burden of it as “disproportionate”."
Fingers crossed that they listen!
https://www.accountingweb.co.uk/tax/hmrc-policy/mt...
Edit - Mods, can this thread be renamed "Making Tax Digital", since it's not just regarding VAT now?
Fingers crossed that they listen!
https://www.accountingweb.co.uk/tax/hmrc-policy/mt...
Edit - Mods, can this thread be renamed "Making Tax Digital", since it's not just regarding VAT now?
If you have a bunch of banks/savings accounts and investment vehicles paying annually but sporadically over a year, that’s lots of admin to do 4 returns a year.
Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
Mr Whippy said:
If you have a bunch of banks/savings accounts and investment vehicles paying annually but sporadically over a year, that’s lots of admin to do 4 returns a year.
Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
No, it's the first step towards real time reporting and a Plus some monthly interest paying Building Society accounts on books, that’d be fun, four visits a year just to update a book to get figures.
Is this all just desperation for revenue as soon as it can be borne?
A one hit boost to revenue, maybe a 3-6 month duration, then back to where it was?
Arguably after that period they’d take less revenue as people will start adding the extra admin to expenses
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