After more than 3,000 responses the tax office has responded to the feedback from the consultation documents.
Here are the key points:
No announcement on the exemption which was £10,000 in the consultations.
Businesses and property companies with turnover below £150,000 will be able to make submissions using the cash basis. This means there is no need for annual accounts.
Businesses with turnover below the VAT threshold will be able to send in three line accounts – sales, costs and profit.
Spreadsheets can be used for bookkeeping but will have to meet MTD requirements. And, will be used with MTD software for submissions in some way. Some level of free MTD software is expected to be available for the simplest of businesses.
It seems MTD software will:
- Enable you to keep your records digitally
- Categorise expenses for you
- Produce a summary
- Prompt you to send the summary to the tax office
There will be a 12-month delay on penalties for late submission and there will be further consults about the penalty model.
The tax office believes businesses will have a one-off cost of £280 to adopt MTD. But, they believe there will be a small ongoing annual saving.
There are a number of unanswered questions so we will do an update when we know more. And, keep in mind that the driver to MTD is to collect £8bn more tax every year.
Image from Flickr by Erikaow.