Good news from the budget regarding the Making Tax Digital threshold.
From a self-employed person’s perspective the budget seems to have been a bit of a sham, from the hike in NIC contributions (which has since been rescinded) and the disappearance of the tax free dividend allowance there wasn’t much to celebrate …. However, there was one bit of good news for the self-employed ….
During his budget speech, the Chancellor confirmed that the threshold for Making Tax Digital will be increased from the proposed £10,000 turnover per annum to £83,000 per annum.
This means that only those that are already at the VAT threshold will need to submit their accounts quarterly and as the VAT is quarterly they will have already been used to completing them on this time scale.
This will give accountants
- More time to educate and raise awareness to their client base.
- Time to familiarise themselves with the Making Tax Digital processes through those larger businesses before full implementation in 2019.
This change in threshold gives smaller companies chance to implement the software and procedures they are going to need, to ensure they are compliant with the process.