The Treasury has indicated that it is unlikely to move on the £10,000 threshold for Making Tax Digital and quarterly reporting despite caving in to pressure and delaying the introduction by one year, reports Sara White
The Threasury has told CCH Daily that the final threshold limit will be confirmed on 20 March.
The decision to set the threshold lies with the Treasury and ministers, but there appears to be little likelihood that the limit with be raised despite calls from MPs, the Lords select committee on the Finance Bill and tax professionals for equalisation with the current £73k VAT threshold.
The confirmation of the final threshold figure will be released along with the final Finance Bill 2017 papers and post-Budget consultations in a couple of weeks.
When pressed on whether there was likely to be any increase in the £10,000 figure, there was little indication that this figure would change.
‘The details of the threshold for quarterly reporting will be confirmed on 20 March when the draft Finance Bill 2017 is released,’ a Treasury spokesperson told CCH Daily.
‘The threshold is £10,000, and the deferral means that those under the VAT threshold will not have to start quarterly reporting until April 2019. The rest of the timetable remains unchanged.’
The delay in Making Tax Digital will benefit the smallest businesses, specifically sole traders, landlords and the self employed who are not VAT registered. All VAT registered affected parties will start quarterly reporting immediately in April 2018.
At the end of January when the first detailed documentation about Making Tax Digital was released, HMRC director of business customer and strategy said: ‘The government has decided that it needs more time to consider the threshold issues, but they will be confirmed before July 2017. We received broad support for the direction of travel, although there was concern about the pace, costs to business and capability of the smallest businesses to make changes.’
The rollout timetable will not change and the plan is to bring incorporated businesses into quarterly reporting in 2019 as originally set out by HMRC.
As yet, the consultation documents on the detailed requirements for incorporated businesses and partnerships under Making Tax Digital have not been released, although HMRC has confirmed that a consultation on the penalties regime will be released on 20 March.