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HMRC internal manual

Self Assessment Manual

Digital Services: Making Tax Digital for Business

In the March 2015 Budget the government announced its vision for modernising the tax system in order to make it easier for individuals and businesses to get their tax right and keep on top of their affairs, meaning the end of the Self-Assessment tax return system.

Changes were introduced gradually from April 2017 ahead of legislative changes introduced from April 2018 for businesses and landlords with a turnover exceeding the VAT registration threshold and from April 2019 for those with a turnover below the VAT threshold and more than £10,000.  Legislation requires digital record keeping, at least 3 monthly updates of summary income and expenses and an annual declaration, for most self-employed businesses and landlords.

The service is accessed on GOV.UK and a phased approach was used with the new functionality being made available to a small number of customers building up over a period of time.  From April 2017, a small number of existing SA customers used the new service voluntarily.

The functionality includes:

  • Registration/Subscription – the service allows new and existing SA customers and their agents to register/subscribe to Making Tax Digital for Business (MTDfB)
  • Software – customers will have to use 3rd party software to keep their business records digitally and to submit their business updates
  • 3 Monthly updates – customers are required to submit updates of their summary business information at least 3 monthly intervals via their software
  • Annual Declaration – customers are required to submit an annual declaration at the earliest of 31 January or 10 months after the end of their accounting period
  • Income Store – the data submitted by the customer will be stored on the NPS record in Income, Accounting, Benefits and Deductions (IABD)
  • Tax Calculator – the information from the customer’s updates or annual declarations will flow to the Tax Calculator and will be viewable to the customer via the Business Tax Account
  • Customer records and accounting activity will move away from SA onto the Enterprise Tax Management Platform (ETMP)

The payment on account process and timing remain unchanged, so one year’s final declaration will form the basis of the next year’s payment on account.

This guidance will be updated in due course.

There have been other digital changes

  • the Agent Services Account is a new HMRC service for tax agents, providing access to new digital services, on behalf of clients, in one place. It has been part of MTDfB’s ITSA CGL since April, so invited agents have been able to send ITSA updates where they already have an existing client relationship.  Existing services for Agents also remain in place.

Agents who’ve been invited to access their AS Account can:

  • Set up a new Government Gateway credential to access new digital services
  • Are risk-assessed to assure us of their status as an existing agent
  • Are assigned an agent reference number (ARN) in ETMP, which allows them to access new digital services through software and Gov.UK
  • Are able to access services through software and Gov.UK which are protected by access controls, ensuring that MTDB data is only accessed by an appropriately authorised agent
  • Are able to sign up a client to MTDB quarterly income and reporting
  • From 17th November, it is a live facility for the Trust Registration Service, so agents can sign up directly from GOV.UK to access the TRS online service.

Companies House and HMRC have started to trial a streamlined Company Registration Service (SCRS), to streamline process for setting up and incorporating a company and registering for CT, PAYE and VAT. This will be part of the overall MTDfB customer journey in future, for new customers. CT and PAYE are in a private beta trial at present.