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  • Writer's pictureJon Harris

HMRC delays Making Tax Digital (again)

Updated: Dec 22, 2022

Earlier this year we terrified you with news that the self-assessment tax return, and the big spreadsheet that you use to help you put it together, were to be consigned to the HMRC dustbin in 2024. The plan was to replace them with a wholly digital system requiring you to use a commercial book-keeping app.

On 19 December, under considerable pressure from other government departments and public criticism, HMRC U-turned on this and now have a different plan for us all to think through. (I mean, it’s December, so we weren’t busy doing any tax returns for actors, were we? No, course not.)

If only HMRC and the Treasury showed some of the stability we’ve come to expect from 10 Downing Street, eh?

We’ve removed our blog of 3 August 2022 which detailed all the changes, so as not to cause you any confusion.

The position now is:

  • So long as you are not VAT-registered, you are not now required to make any change until April 2026.

  • If you are VAT-registered, you should already have changed to Making Tax Digital.

  • If you are one of the <10% who make up your accounts to a date other than the end of March, then you should still consider changing your date before 2026 and you need detailed personal advice about this.

  • For everyone else: those making more than £50K income per year will come into the new Making Tax Digital system in April 2026, and those making less in April 2027 (with a possible threshold below which you will still be allowed to stay in the old system).

So, it’s still coming for most people – but it’s coming later.

As we said back in August, there are good reasons to use a book-keeping app quite apart from the fact that it will be necessary from 2026. It’s quicker, way less hassle and way more accurate than trying to do the job any other way. You don’t have to wait till 2026 for this, and indeed it is probably wiser not to, so that the change is not an urgent matter for you when it comes.

We will continue to recommend either Xero’s ‘Cashbook’ product (bought through us for about £6 per month) or the SansDrama app (about £3 per month), for our non-VAT-registered sole trader clients. We believe they offer the best and easiest all-round functionality and these are the packages that we feel best able to support our clients with.

As the changes get closer, we’ll be with you for lots of webinars and presentations, and we are always here for all your questions.

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