The Making Tax digital initiative was first announced in Budget
2015, followed by the publication of the 'Digital Road
Map', in December 2015. This proposed introducing the
requirement for those with self-employment income or rental income
over £10,000 (before expenses) to update HMRC quarterly on
the income and expenses of these enterprises, rather than including
the income on their self-assessment tax return. The intention is
that this process, together with more third party information being
added to taxpayers' Digital Tax Accounts, would ultimately lead
to the abolition of the tax return.
Six consultation documents (and another overview
document) issued in August 2016 set out more details
of the proposals. These consultations closed on 7 November and we
may hear more at the Autumn Statement following the consultation
feedback. The quarterly reporting proposals are intended to apply
to unincorporated businesses with turnover of more than
£10,000 and will come into
