BUDGET 2017 – HAS ANYONE OUT THERE BEEN LISTENING?
Published On: 08 March 2017
For once we are both pleased and surprised to say HMRC have been. After mounting criticism and almost unanimous requests from small businesses and their representatives, HMRC have today announced a one year delay in the introduction of Making Tax Digital for Businesses (MTDfB) with a turnover below the soon to be introduced £85,000 VAT threshold. This turnover threshold will also apply to landlords with an annual turnover of less than £85,000 per annum.
The start date for these businesses joining MTDfB is now postponed until 6 April 2019.
This is a welcome U - turn where only a few days ago HMRC were still trying to justify mandating millions of businesses into MTDfB. However for those businesses with annual turnover above £85,000 the quarterly reporting regime starting date of 6 April 2018 looms large on the horizon.
Those businesses with an annual turnover of £10,000 or less will remain outwith MTDfB
Aside from MTDfB what else was announced by the Chancellor today in the last ever Spring Budget. The answer is very little that is due to take effect from 6 April 2017 that was not known previously. One significant point that will take effect from 1 April this year is the reduction in corporation tax to 19% (first announced in Budget 2015)
Other ‘headline grabbers that will impact many taxpayers are the reduction in the dividend allowance from £5,000 to £2,000. Also announced was an increase in the Class 4 national insurance contribution rate which affects the self-employed. Both take effect from 6 April 2018
Part of the justification for this seems to be that the self-employed have benefitted from the recent changes to the state pension however is that really a trade off for no paid holidays, dealing with the seemingly never ending bureaucracy and unlimited liability? We will let you decide.
A more detailed analysis of today’s Budget will follow.