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Where Taxpayers and Advisers Meet

Making Tax Digital - Threshold for very small businesses?

DJ314159
Posts: 45
Joined: Wed Aug 06, 2008 3:34 pm

Making Tax Digital - Threshold for very small businesses?

Postby DJ314159 » Tue Oct 23, 2018 4:13 pm

Will all businesses from April 2020 be obliged to go digital, or is there some cut-off for very small businesses, say with an annual turnover of less than £2k for example?

SteLacca
Posts: 437
Joined: Fri Aug 07, 2015 2:17 pm

Re: Making Tax Digital - Threshold for very small businesses?

Postby SteLacca » Thu Oct 25, 2018 9:43 am

No-one knows. No-one even knows if MTD for income tax will happen in 2020 (or even, if at all).

DJ314159
Posts: 45
Joined: Wed Aug 06, 2008 3:34 pm

Re: Making Tax Digital - Threshold for very small businesses?

Postby DJ314159 » Thu Oct 25, 2018 3:31 pm

Thanks for the reply. There seem to be a lot of unkowns surrounding MTD at the moment.

robbob
Posts: 2765
Joined: Wed Aug 06, 2008 4:01 pm

Re: Making Tax Digital - Threshold for very small businesses?

Postby robbob » Thu Oct 25, 2018 3:42 pm

from the horses mouth - hopefully when they say at least they mean never :(

Having listened to concerns about the pace of change, particularly for small businesses, the government announced in July 2017 that the pace of mandation would be slowed and that Making Tax Digital will not be mandated for taxes other than VAT until at least April 2020.


with regard to vat its more than a slight disgrace that no one will have any time to properly test drive a decent variety of packages before the deadline, and that hmrc will not be ready fully from their IT point of view despite the 1/4/19 start date is even more of a disgrace - i have no idea why the top bods at hmrc are ploughing on making life a nightmare for small business when they faithfully promised originally there would be plenty of time. Heads should roll and those heads should roll from the top and anyone below that who is trying to tow the incorrect party line that it will be alright on the night - no it won't be for the poor bods forced into immediate radical change. It would be very simple to take the hassle away and make this non mandatory till 1/4/2020 and everyone would go away happy as long as the IT rolls out in the next 6-9 months.

look at the example of a couple of simple business types who will have to wait till early next year before they can get up and running and probably have next to no time to get up and running before the legislated deadline.
Early 2019 Open to partnerships and those customers that trade with the EU.

Grrrrrrrrrr

brightdav82
Posts: 1
Joined: Sun Oct 28, 2018 10:11 pm

Re: Making Tax Digital - Threshold for very small businesses?

Postby brightdav82 » Wed Oct 31, 2018 2:23 am

You might not need to make the switch immediately – if your annual turnover is less than £2k, it’s well below the VAT threshold of £85,000 taxable turnover required.

Ref: https://www.atkinsonsca.co.uk/news/making-tax-digital-for-vat-registered-businesses/

Lambs
Posts: 1418
Joined: Wed Aug 06, 2008 3:15 pm

Re: Making Tax Digital - Threshold for very small businesses?

Postby Lambs » Wed Oct 31, 2018 10:30 am

Even thinking about MTD brings me out in hives.

However:

The government has previously stated that micro-businesses, with gross income / turnover of less than £10,000 per year will NEVER be required to apply MTD.

The MTD threshold specifically for VAT purposes is the standard VAT registration threshold itself (VATR 1995 (SI 1995/2518) as updated by VATAR 2018 (SI 2018/261) introducing new Reg 32B)– currently £85,000 and forecast to remain so until April 2022 at the earliest, from the looks of things.

Thre is a Low Income Exemption specifically for Income Tax purposes, thanks to TMA 1970 Sch A1 Para 15, as updated by regulations (Reg. 25) currently in draft form. I expect that the £10k threshold (or, more practically, something higher and flexible, such as the Personal Allowance) will be slotted in there by the time the regulations are finalsed.

Which may be never.

Off for a shower and a scrub-down.

Regards all,


Lambs

robbob
Posts: 2765
Joined: Wed Aug 06, 2008 4:01 pm

Re: Making Tax Digital - Threshold for very small businesses?

Postby robbob » Wed Apr 03, 2019 1:40 pm

Ok Interesting scenario ref MTD

Business a - cafe sales last 12 months 93k to 31/3/2019 - not currently vat registered but based on rolling 12 month turnover they now need to be vat registered (say 1/4/19 for convenience) and their sales will also be above MTD threshold based on 93k.

Business b - cafe sales last 12 months 93k (gross vat inclusive value) - business has been vat registered for some time and will continue to be vat registered on the basis it must stay registered with future turnover expected to remain 93k - however when we calculate turnover for MTD purposes - its net of vat sales that count so turnover is only £77,500 and therefore this business doesn't need to register for MTD

Would others agree that despite having the same cash turnover only business a comes within MTD ?


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