A delay to tax reforms which would have seen sole traders and small businesses obliged to keep digital records and report income quarterly to HMRC has been welcomed by financial experts.
The government had wanted to make the radical changes affecting 4.3m self-employed people, small businesses and landlords with an income of more than £10,000 come into effect from April 2023. Now it has been pushed back to April 2024.
Officials said they recognised the pressure businesses were under as they emerged from the pandemic and so had allowed the extra time to prepare.
General partnerships will now not be required to join MTD for ITSA until the tax year beginning in April 2025, while the date other types of partnerships will be required to join will be confirmed in the future.
The postponement also coincides with news from HMRC that in 2019/20 MTD for VAT was unable to achieve one of its primary aims of closing the tax gap.
Experts at Whitley Stimpson, one of the largest independent accountancy practices in the area, are keen to advise on best practice around the government’s Making Tax Digital (MTD) programme and want to ensure businesses are aware of the rules, subsequent concessions and how their business may be affected.
John Skinner, senior manager at Whitley Stimpson, said: “This delay is very welcome. Many of our clients are small businesses and sole traders who have been working very hard to recover from the huge impact of the pandemic.
“Adding another administrative burden like this would have been a step too far in such a relatively short space of time.”
The MTD programme is designed to improve the accuracy of tax returns. A pilot scheme is already underway and will be gradually expanded during the 2022 to 2023 tax year.
For further information contact John Skinner johns@whitleystimpson.co.uk or visit www.whitleystimpson.co.uk