Contractors' Questions: Will MTD feature in the Autumn Budget?
Contractor’s Question: It all seems to have gone quiet about Making Tax Digital. Is that because it’s been delayed and doesn’t apply until 2019? Or is the expectation that the Autumn Budget will -- annoyingly—again change what us self-employed must do, and from when?
Expert’s Answer: Making Tax Digital (MTD) is indeed coming, but I would not expect any further detail this year as the main announcements were made in the summer regarding the delays and the implementation of MTD for VAT in beta from April 2018.
Initially, MTD was set to come into force for sole traders and limited companies earning over £85,000 in April 2018, before rolling out for those under this threshold the following year.
However, the government has listened to claims that many self-employed professionals may not be ready in time; they’ve subsequently moved the deadline back to April 2019 for anyone earning over the VAT threshold of £85,000. This only applies to VAT returns -- a crucial point, since income and corporation tax only comes into play the following year (2020).
Anyone below this threshold who has voluntarily registered for VAT can choose to submit their VAT collections digitally too, but it’s only obligatory for those earning more than £85,000. In fact, self-employed professionals below the threshold can choose when they want to ‘go digital’: it’s totally up to you when MTD is applicable.
The expert was Amanda Swales, a director of GoSimple Software.