Making Tax Digital Update REUTERS / Dominic Ebenbichler Making Tax Digital Update Mark Purdue Product Manager – Tax Products Thomson Reuters October 2018

Content Making Tax Digital – Key points Update on MTD Progress at HMRC What are Thomson Reuters doing to support the process

Thomson Reuters Tax & Accounting – part of a larger organisation (e.g. Legal, Reuters News etc.) Operates in multiple countries US UK Australia Canada South America India In the UK, we provide tax and accounting software to firms of accountants under the Digita brand

Digita Devon based company since mid-1980’s Acquired by Thomson Reuters in 2008 Professional suite of products Tax (Corporate, Personal, Trust, Estate) Accounts Production Company Secretarial Practice Management We support sole accountants to Top 4 firm

Making Tax Digital Key Points

Making Tax Digital – What Is It? HMRC modernisation of the tax systems to improve efficiency, and reduce errors Current scope is VAT Extending to Income Tax and Corporation Tax no earlier than April 2020 Plan is to reduce tax gap attributed to errors and mistakes For the scope of VAT, two main changes; Business VAT Records must be kept digitally Submission of VAT data must be done via ‘digitally linked’ software Initial impact are businesses with turnover above the VAT threshold Those who have voluntarily registered (below VAT threshold) are currently exempt from rules Additionally, it is possible to be excluded from the MTD rules by reason of age, religion, location, or for any other reason.

Making Tax Digital Pilot and Next Steps

MTD Timeline  Pilot Commences  Go Live Date 2018 2019 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sole Trader – UK only  Limited Company – single – UK Only

MTD Timeline First VAT Period that starts on or after 1 April 2019  Pilot Commences  Go Live Date 2018 2019 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sole Trader – UK only  Limited Company – single – UK Only Partnership – UK Only Sole Trader – EU Sales Partnership – EU Sales Limited Company – single – EU Sales First VAT Period that starts on or after 1 April 2019 When is my business affected? For most businesses, one of three start dates; 1 April 2019 1 May 2019 1 June 2019 Thinking of your most recent VAT quarter; Quarter to end of September = Start 1 April 2019 Quarter to end of October = Start 1 May 2019 Quarter to end of November = Start 1 June 2019

MTD Timeline  Pilot Commences  Go Live Date 2018 2019 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sole Trader – UK only  Limited Company – single – UK Only Partnership – UK Only Sole Trader – EU Sales Partnership – EU Sales Limited Company – single – EU Sales

MTD Timeline  Pilot Commences  Go Live Date 2018 2019 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Sole Trader – UK only  Limited Company – single – UK Only Partnership – UK Only Sole Trader – EU Sales Partnership – EU Sales Limited Company – single – EU Sales Traders Based Overseas Limited Company – VAT Group / Divisions Trusts Not for profits (non-corporate) Annual Accounting Gov’n, NHS, Local Authorities & Public Corp.

Supporting the MTD Pilot

What are the challenges of MTD? Key challenges for accountants Supporting their clients Submitting VAT data to HMRC Record keeping Must be digital Spreadsheets are now OK by HMRC (assuming they are suitable for your business!) Link needed from transactional record to the submitted data Submitting Data to HMRC Currently, a large number of submission are directly to HMRC via their website No longer possible under MTD Submission via software

Support from Thomson Reuters Easy to use software for accountants Allowing businesses to continue with existing spreadsheet record keeping Allowing the accountant to make VAT adjustments via spreadsheet Submit VAT data to HMRC

Questions?