As reported on 15/08/2016 via Enterprise Nation: Accounting and tax, Business law, and Money and cashflow, following a proposal which led to strong protests from business owners, the government has announced that more than one million small companies will not be required to submit tax information online.
HM Revenue & Customs’ Making Tax Digital strategy announced in the 2015 Autumn Statement, which aims to transform the UK tax system by 2020, proved controversial.
A petition against plans for quarterly filing of tax details attracted more than 114,000 signatures and led to a debate in Parliament.
Publishing six consultation documents on Monday, HMRC said 1.3m unincorporated small business and landlords with a turnover or gross income from property under £10,000 will be excluded from the requirement to keep digital records and make regular updates to the government.
Ministers will consult on whether the £10,000 limit is appropriate and if other small businesses should be excluded.
The government also announced the deferring of the mandatory start of digital tax by one year for small unincorporated businesses and landlords with incomes above £10,000 and below a threshold still to be determined.
In addition, HMRC confirmed that small business owners who genuinely cannot use digital tools won’t have to do so, and it plans to open up cash accounting (tax paid based on the difference between money taken in and paid out rather than invoices issues) to more companies.
Jane Ellison, financial secretary to the Treasury, said: “We are committed to a transparent and accessible tax system fit for the digital age, and Making Tax Digital is at the heart of these plans. This new system will make the UK’s tax administration more efficient and straightforward, and will offer businesses greater clarity when it comes to paying their tax bills. “By replacing the annual tax return with simple, digital updates, businesses will be able to concentrate on putting people and profit, not paperwork, first.”