What have they told us already?
On 31st January 2017 the government issued it’s response to the six consultation documents issued in August 2016. Whilst some of the questions were answered some were not. On Wednesday the Chancellor of the Exchequer, Philip Hammond, will issue his first and last Spring Budget. In this, and the publications issued around it, further details may be announced to fill in the gaps on just what businesses have got to do with regard to Making Tax Digital.
The big question unanswered
The main question that remains unanswered is the starting level of turnover above which quarterly reporting becomes mandatory for businesses. In the consultation documents they indicated that this would be a £10,000. Such a low figure has been widely criticised and other suggestions, such as the VAT registration limit has been suggested instead. This is currently £83,000 but this figure is likely to be increased in the Budget. Some have suggested that that this should be as high as twice the VAT limit.
The deciding factors
The Treasury believe that they are losing huge amounts of taxation as a result of the current standard of poor bookkeeping done by business owners. The Government believe that mandatory recording, using digital bookkeeping programs. will help recover the lost millions of taxation. They want the starting level to be as low as £10.000 as they clearly believe that the tax loss is amongst the smaller businesses and landlords. This is also probably the reason why all unincorporated businesses are the first to have to cope with quarterly reporting from April 2018. The ultimate decision is probably a political one, and we wait to see if this is delivered in this week’s budget.
Deb-on-Air – A solution for our clients
Our clients will need to have a means of recording their transactions digitally. Like all accountants, at DEB we are embracing the move to online programs such as Xero, Sage One, and Quickbooks Online. However, smaller businesses will need a cheaper and more simpler alternative. We are targeting the end of April for the launch of DEB-on-Air, our online bookkeeping solution which will be free to all DEB clients. We will introduce the key issues on quarterly reporting to our clients by means of a series of weekly seminars, at which all the options open to them will be considered. For those who cannot cope with the new changes we will be able to take over their bookkeeping using DEB-Book ProActive, the program we have developed aimed at reducing the time taken to do client’s bookkeeping.
Our weekly seminars will be freely available to both DEB clients and any other business owners who would like to attend. If you would like to book a place, please use the link below, or telephone us on 01226 245824.
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