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Making Tax Digital is scrapped for most of you reading this.
This complete nightmare of a pointless arse of a policy has been scrapped for businesses under the VAT threshold.
MASSIVE HAPPY DANCE
(What’s the VAT threshold? Your business isn’t required to deal with VAT unless your business’s income is approaching or over £85k at the time of writing)
If your business’s income is over the VAT threshold, it’s still good news as you won’t need to deal with Making Tax Digital until 2019.
Which is much more reasonable and to be honest with you, once your business is at that level, your record keeping needs to be properly organised anyway.
(If your records aren’t organised to your satisfaction/necessity, or you’re making a loss, find out more about the Business Expenses Review).
If your business is under the VAT threshold and you voluntarily registered for VAT, then you don’t need to do Making Tax Digital as it’s your business income that matters, not your registration. WOOT!
Making Tax Digital is a new policy to get all record keeping online.
Initially it meant even spreadsheets weren’t allowed. The first wonderful news was when that loony idea was shelved.
The idea is to submit your records to HMRC using software every month and in theory at least you would then have an idea of your tax bill.
You’d have had to use software, no matter how inappropriate it was for your business (or your intermittent rural connection), and do your record keeping every month without fail (real fun if you had a newborn or a launch) and it made no allowance that not all expenses can be accurately accounted for in that timescale.
That’s before we even get into the havoc it would cause in your tax return when often what’s in your record keeping is a bit different to what your tax return looks like. That’s a normal part of accounting/lowering your tax bill/improving your cash flow (also legit and not dodgy).
They were also going to start with the businesses it would hit hardest and be most difficult for.
And it was meant to start in 2017. Yup. Crazy.
I’ll skip the other reasons why it was crazy for Making Tax Digital to be compulsory for businesses under the VAT threshold since they’ve scrapped it. (You can insert my months long rant here if you like 😉 )
What’s important is that IT’S GONE.
If you want to take part in Making Tax Digital, you still can.
Which is also brilliant (I can’t quite believe HMRC have done something so consistently wonderful for everyone).
You may want to register to take part if you already have your records on accounting software, stay up to date every month without fail and having an idea of your tax bill is worth a possible query about what happened when things look a bit different after your tax return is done (money gets moved around in a tax return to comply with accounting rules and to lower your tax bill. So your numbers in your tax return can be different to your records).
Contact HMRC if you’re interested.
IT’S GONE IT’S GONE IT’S GONE
HAPPY DANCE HAPPY DANCE HAPPY DANCE
BRING ON THE GIN!
I’m quite pleased.
This is possibly the best news I’ve ever shared.
Read more about it from HMRC (it’s in bollocks-speak but the important points are easily understandable).
I understand my joy may seem quite weird if all this is new to you but it would have put thousands of people out of business. Not necessarily in the going bust sense, more in the ‘it’s not worth it’ sense.
A ‘hobby business’ you may be according to HMRC if you don’t hire anyone and your business income is under a mill, but that doesn’t make you less important.
Your business can be the way you express your skills, your talents, your abilities, your love of what you do, how you help people, make a difference, pay for treats and holidays, and ‘even’ the basics like paying the mortgage and feeding your children.
Your business can be the way you stay sane when caring for much loved relatives.
It can be the way you get off benefits.
It can be the only way you can work around your children or caring responsibilities the world of work being the inflexible place it is.
Your business can be the only option available if you have a chronic health condition.
It can be the only option if you have Aspergers like I do.
Your business can be how you make a living if you’ve been ‘let go’ for being pregnant.
It can be simply the joy of being your own boss and working towards or living your dream life.
Our businesses are more than ‘only profit’ and the burdens of compulsory Making Tax Digital for businesses under the VAT threshold would have killed thousands of them under a blanket of overwhelming online paperwork and details and learning curves that stretched to the horizon.
I’ve glossed over most of what it involved as it wasn’t good and the few times I shared with clients what was coming they were so scared I stopped talking about it until HMRC had finalised a start date.
And now it’s gone.
JUMPS IN AIR WITH VICTORY CRY
I’d love to hear from you.
If you feel connection with what I shared today and you’re ready to feel more understanding about the money in your business, book a 30 minute conversation with me at no charge.
We’ll explore what you want to change, what’s working, what’s not working and how I can help.
Looking forward to talking with you,