Personal tax
The outcomes of an earlier review by the government into mixed-use property purchases and multiple d...
By RJP LLP on 18 March, 2024
Accountancy • Accounting standards • Business Services • Business Tax • HMRC • Personal tax • Taxation
Consultation Update: Opportunity to comment on Making Tax Digital Proposals
By RJP LLP on 21 September 2016
In spite of having a new government, the original Making Tax Digital (MTD) initiative remains unaltered. It will mean we are all paying taxes in real-time from a single digital tax account by 2020.
A few weeks ago the first consultation documents on these proposals for partnerships and unincorporated businesses, which includes landlords with unincorporated property portfolios, were published.
Lesley Stalker wrote about the consultation proposals for is4profit.co.uk, outlining what the government's recommendations are and the implications for those involved.
The changes proposed will include a number of amendments to current accounting practices including:
- Changes to the ‘basis period rules’
The ‘basis period rules’ which set out accounting periods for partnerships and the self employed may be changed, enabling greater flexibility for seasonal businesses. Under the proposed rules, taxpayers will be able to set their accounting dates to fit in with other reporting obligations and individual preferences, and anyone wishing to remain on an annual accounting period for tax may do so. The same will apply for unincorporated landlords;
- Reporting of expenses
The rules for reporting capital and revenue expenditure will be simplified, ensuring that assets bought for use in a business and which lose their value over time, e.g. computers or furniture, will continue to be treated as capital items and attract up-front tax relief.
- A higher cash basis accounting threshold
The turnover threshold of cash basis accounting could be extended to make it available to larger businesses and also landlords, in order to ease the transition to quarterly reporting. It should be noted that partnerships with corporate members, limited liability partnerships and other similar, more complex partnership entities would not be able to use the cash basis;
- Voluntary pay as you go
The introduction of voluntary pay as you go options across all tax categories will mean taxpayers can spread tax payments to avoid either getting into arrears, or being unable to pay their tax bills;
Other changes proposed include:
- Alignment of the tax administration framework including a simplification of late filing and late payment penalties;
- Use of third party information to calculate tax liabilities more accurately.
If you would like advice on these changes, or want to comment on the proposals, please get in touch by emailing las@rjp.co.uk.
