Agents and tax advisers
Start date: 1 May 2017
HMRC is now reaching out to key players, including accountants, agents and tax advisers.
The testing of Agents Services Accounts began with three or four agents on 1 April 2017. Each practice will need one account across the firm’s offices, regardless of their locations. Agents and tax advisers will have to create a Government Gateway credential, with existing clients transferring to a newly-established Agent Services Accounts which will be mandatory for HMRC access under Making Tax Digital.
From 1 May 2017, agents will be able to send quarterly updates for clients; from 1 June, agents will be able to sign up clients into Making Tax Digital via the agent-led authorisation service with client consent and agents/clients can delete links between agent’s and client’s accounts.
VAT-paying unincorporated businesses with turnover above £85,000
Start date: 1 April 2018
This group includes unincorporated businesses, self employed people, sole traders and landlords. From 1 April 2018, they will have to start quarterly reporting if they have profits chargeable to income tax and pay Class 4 national insurance contributions (NICs).
Unincorporated businesses, with turnover between £10,001 and £85,000
Start date: 1 April 2019
Sole traders, self employed people and landlords between the £10,000 exemption threshold and the £85,000 VAT threshold will have to start reporting on a quarterly basis from 1 April 2019. Currently, they report via self assessment (if they have profits chargeable to income tax and pay Class 4 NICs (ie, turnovers below VAT threshold)).
From 1 July 2017, automatic tax code adjustments will kick in, designed to prevent PAYE under and overpayments.
From 1 April 2019, those below the VAT threshold will have to start reporting all VAT payments through Making Tax Digital.
VAT reporting
Start date: 1 April 2019
All companies will have to start reporting VAT returns.
Incorporated businesses
Start date: Not yet confirmed
HMRC has yet to release any consultation or information about its Making Tax Digital regime and timetable for incorporated businesses.
Businesses paying corporation tax
Start date: 1 April 2020
From 1 April 2020, quarterly reporting starts for businesses paying corporation tax (upper threshold still to be confirmed).
Partnerships up to £10m
This group is partnerships, including small and mirco partnerships, up to small firms such as accountants, architects and legal practices, including LLPs.
Approximately 400,000 partnerships will have to report their tax positions and obligations through a nominated partner under Making Tax Digital from 1 April 2018.
Each partner’s estimated income would be based on the profit allocation as reported to HMRC. As a result, each partner will not need software or, maintain their own digital records and regularly update HMRC unless they have other business interests.
Large partnerships over £10m turnover
Start date: 1 April 2020
Complex partnerships, those with turnover of £10m or more, will be required to start keeping digital records and provide quarterly reports for income tax from 1 April 2020.
There is, as yet, no upper limit for taking part in Making Tax Digital for partnerships, although HMRC has suggested an exemption threshold for larger businesses could be put in place as their affairs become too complicated, and a similar measure could be taken for partnerships.
Large corporation taxpayers over £10m turnover
Start date: 1 April 2020
Large corporation taxpayers, those with turnover of £10m or more, will report through Making Tax Digital from 1 April 2020.
There is, as yet, no upper limit for taking part in Making Tax Digital for businesses, although HMRC has suggested an exemption threshold for larger businesses could be put in place as their affairs become too complicated.
