Who will MTD affect?
The MTD for business programme affects everyone with a turnover of more than £10,000 per year. There is a phased approach with the self-employed and landlords being the first group required to use MTD from April 2018.
By April 2020, all businesses over the £10,000/year threshold will need to be using MTD.
For individuals and businesses, there’s a range of exceptions in place for those with disabilities and genuine difficulty getting online. Charities have been completely exempted from the scheme, but any trading companies they operate still are required to comply.
Will I have to do four tax returns each year?
No. Businesses will be required to submit an update once per quarter, followed by an annual submission. The updates will be very simple and, in most cases, will be done automatically by your accounting software.
Thanks to the updates and the greater information integration planned by HMRC, the annual submission should be quicker and simpler than the existing confirmation statement.
Will I need to purchase software?
You will need to use software to submit your quarterly returns, but whether you need to pay for it will depend on the size and nature of your business.
HMRC and the business software industry have agreed that there will be provision of free software packages to serve smaller and simpler businesses.