HM Revenue and Customs delays digitization of income tax by one year until April 2024

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HM Revenue and Customs will delay the expansion of the Making Tax Digital program by one year to cover income tax payments.

Self-employed persons, small businesses, and landowners who are registered with Income Tax Self-Assessment (ITSA) and generate more than £ 10,000 of business or property income annually have previously had a deadline for registering with MTD in April 2023. rice field. This is currently 12 months and has been postponed until April 6, 2024.

Partnerships that pay income tax will need to adopt an online platform until April 2025, and at some point (not yet identified) after that, they will have to follow a more complex partnership model.

Treasury Secretary Lucy Frazer, who announced the postponement, said the government wanted to give taxpayers enough time to prepare their digital systems, especially given the additional challenges posed by the coronavirus crisis.

“The digital tax system we’re building will be more efficient, it will make it easier for customers to get the tax right, and it will bring a wide range of benefits to productivity,” she said. “But as we get out of the pandemic, we all recognize that it’s important to have enough time to prepare for change, so we’re giving people an extra year to do so. We continue to work on creating Tax Digital and building a tax system suitable for the 21st century. “

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To switch to MTD, users must employ compatible software tools. Currently, there are seven products that are certified as income tax compatible, three of which are available in free versions. Two of the seven are designed purely for corporate or personal use, and one is specifically designed for professional tax agents who work on behalf of clients. The other four can be used by either the enterprise or its appointed agent. Five more companies are developing the program.

The number of options will increase significantly between now and 2024, and may increase in the future beyond that. Well over 500 software tools have been certified as compatible with the VAT program Making Tax Digital.

Although the deadline is now more than two and a half years away, HMRC encourages businesses and individuals to voluntarily enroll in the MTD of their income tax program as soon as possible.

The pilot scheme is already underway and we are inviting participants to register. According to the ministry, these exams will be “gradually expanded during the tax year 2022-2023 to prepare for larger exams in the tax year 2023-2024.”

“Collaboration with tax professionals and customers is important in the development of MTD, and HMRC has worked closely with business and tax community partners on the proposed design and scope of ITSA’s MTD,” said the tax authorities. Stated. “HMRC will continue to work closely with business and accounting representatives and software developers to ensure that taxpayers are fully supported when adopting MTD for ITSA.”

The newly published regulation aims to provide taxpayers with all applicable legal guidance and technical details regarding the digitization of income tax.

An exemption from the mandatory use of an online system is for those who have “reasonable or impractical use of a computer or the Internet due to age, disability, location” or other justifiable reasons, or “those who oppose it”. May be given to. To use a computer for religious reasons. “

HM Revenue and Customs has provided details on how to apply for such a tax exemption in due course and has shown that the process includes the right to appeal once it is initiated.

Although the digitization of income tax payments has been postponed, the expansion of the existing VAT program Making Tax Digital will proceed as planned in just over six months.

Beginning April 2019, companies with annual sales above the £ 85,000 threshold will be required to file a quarterly VAT statement via the digital platform.

Beginning April 2022, all VAT-registered companies, regardless of size, will be required to complete the switch to MTD.

The government has shown that “more than 30%” of companies that make less than £ 85,000 have already done so.

HM Revenue and Customs delays digitization of income tax by one year until April 2024

Source link HM Revenue and Customs delays digitization of income tax by one year until April 2024

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