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AND CHANGES FOR 2017/2018 previously announced
(Subject to details in the Finance Bill)
Ellis Atkins have taken all due care in the presentation of these notes. No responsibility for loss occasioned to any person or company acting or refraining from action as a result of any material in these notes can be accepted by Ellis Atkins, its partners or staff. Please contact us or your own professional advisor for advice specific to your circumstances.

As part of the Government’s vision to modernise the tax system, it is intended that tax returns will be replaced by digital tax accounts for millions of individuals and businesses.

From April 2018 it is intended that businesses, self-employed and landlords with gross income over the VAT threshold will need to keep digital records and provide regular quarterly updates to HM Revenue & Customs.

From April 2019 businesses, self-employed and landlords with gross income under the VAT threshold will then need to comply and maintain digital records and quarterly updates (as well as those registered for VAT).

From April 2020 it is proposed that companies will enter the Digital Taxation regime.

HM Revenue have confirmed their intention to facilitate Digital Taxation by:-

  • reducing the threshold for entry into the cash basis to £150,000 (confirmed in the Spring 2017 Budget);
  • simplifying the tax rules between capital and revenue expenditure with the adoption of the cash basis;
  • for a transitional period (of at least 12 months after Digital Taxation is introduced), to charge no penalties for late quarterly submissions;
  • to allow certain exemptions from Digital Taxation e.g. in respect of those individuals that have no internet access or where gross income from self-employment or rental income falls under £10,000 per annum;
  • to allow a “Pay as you go approach” for the payment of any tax due for the year;
  • to provide individuals with apps and prompts to assist them to provide the correct information.

Further consultations are still being undertaken in regard to the adoption of Digital Taxation. We will write to you in due course when further information is released.