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tgj1961
#1 Posted : 30/11/2018
Joined: 2/24/2018(UTC)
Posts: 30
Organisation: Swale Borough Council

I've seen references to MTD Phase 2 but from what I've seen this simply refers to bringing registered businesses with turnover below £85,000 into the MTD fold.

I can see no problem in our making our returns MTD compliant using the 'multiple spreadsheets and bridging software" example per notice 700/22 (to which, unless Agresso can come up with something better, at the moment the PWC software looks the most attractive).

However, our VAT consultants have advised previously "Phase 2 will begin on1 April 2020 and, at this point, it is thought that HMRC should be able to access business financial systems at invoice level." Also, included in their recent update on MTD was the comment "...Phase 2, from 1 April 2020, requires more work...".
Have HMRC released or suggested there will be more MTD developments apart from the Phase 2 progression I've noted above? I searched but found nothing on this elsewhere?

If HMRC do start demanding access to the source of our base data which creates the initial records spreadsheets, it would be a concern but if HMRC do have this ultimately in mind and have a provisional timetable for it why can't I find reference to this?

Regards all.

Edited by user 30/11/2018  | Reason: Not specified

Trevor Steel
#2 Posted : 30/11/2018
Joined: 4/3/2018(UTC)
Posts: 15
Organisation: Aneurin Bevan University Local Health Board

Was thanked: 8 time(s) in 8 post(s)
By "phase 2", are they just refering to the requirement to have digital links between records and the return calculation? Technically this is part of the "main" MTD, and comes into force from either the April or October 2019 return (October for Local Authorities, but if you also do returns for other organisations they may still be April). However HMRC have agreed a "soft landing period", up to and including the March 2020 return, where they won't impose penalties for failing to comply with the digital links element. Because of this, some are treating digital links almost as a separate piece of work, with an April 2020 implementation date.

Alternatively, they could mean the transaction level data mentioned in section 5 of notice 700/22. Work on the ability for them to collect this is unlikely to be underway before April 2020 and (so far) the suggestion has been that provision of the data would be optional.

Some other countries that have digitised their tax systems do already require a much greater level of detail, some actually in "real time". But I think we're still a long way away from that here!
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