Further to earlier news articles regarding Making Tax Digital, HMRC will not now seek to implement compulsory quarterly digital reporting of trading and property businesses results starting in 2018. Instead the process will be slower and initially only for VAT purposes, which is excellent news.
Due to the General Election, a shortened version of the original 2017 Finance Bill was enacted by parliament on 27 April, containing only 148 pages compared to 762 pages in the original Finance Bill published on 20 March 2017.
As part of the measures being introduced with Making Tax Digital, to assist landlords in reporting their income, the cash basis will be available for unincorporated landlords from 6 April 2017 (ie for 2017/18 onwards).
HMRC have confirmed that legislation will be introduced so that any retrospective variation to a partnership’s profit sharing arrangements made after the period end will not apply to returns for accounting periods starting on or after 5 April 2018.
In the Budget on 8 March, the Chancellor provided a lengthy explanation comparing the position of the self employed and employees, noting the more favourable tax treatment of the self employed and changes that make the benefits system more comparable with employees (with the introduction of the new state pension), but omitting to mention the real risks for genuine entrepreneurs.
For many farmers and landlords, the changes announced in Philip Hammond’s Spring Budget will not take effect until April 2018, which gives time to consider the detail and is to be appreciated. However, the changes already announced to tax relief on interest where some of the borrowing relates to let residential properties will have an impact from this April, so landlords should consider this if they have not already done so when arranging borrowing.