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Landlords are welcoming confirmation that only those landlords with a turnover above £85,000 will be expected to keep digital tax records.The Treasury’s announcement mirrors the calls that were made by the Residential Landlords Association (RLA) in its submission on the consultation introducing the initiative, and reflects concerns expressed in oral evidence the RLA provided to a House of Lords Committee.Under a new timetable to implement the change, only landlords and businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes and they will only need to do so from 2019.Ministers had previously said it would apply to those with turnover above £10,000. Businesses and landlords will also not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.RLA Policy Manager, John Stewart, commented:“The RLA has long called for an increase in the threshold at which digital tax records will be required, and for more time to enable landlords to properly implement this radical change.“Whilst we support efforts to improve the efficiency of the system, faced with unhelpful changes to the way they will be taxed, the last thing landlords needed was an imminent change to the way they keep their records.“The Treasury has made the right decision in giving landlords more time to prepare for the policy, where is applies to them, and we welcome the Government listening and responding so positively to our concerns.” SEE ALSO - Ltd Co. landlords worse off than sole tradersUP NEXT - Questions relating to Limited Co...DON'T MISS - How to avoid a tax investigation by HMRCNOW WATCH: (Video recorded January 2016).
This is good news, thanks for letting us know Vanessa.
Are you saying that if your turnover is over £85k you will have to pay VAT
I think that your wording causes confusion, or is wrong. You say that LL only have to keep digital records for VAT purposes, but LL don't pay VAT. Do you mean what you typed?
Hi Nick,It was a press release from the RLA which I posted, so not written by me.
Just to clarify the position here, only businesses with a turnover over the VAT threshold will have to keep digital records under the revised timescale, and this is only for VAT purposes. HMRC state that as businesses over the threshold are already completing VAT returns, “no business will need to provide information more regularly during this initial phase than they do now.”
It is worth confirming, that standard income from letting an investment property is exempt from VAT. If there is however business activity in existence, such as income from a Furnished Holiday Let, then the rules are different, and exceeding the threshold would result in you needing to register for VAT.
RITA4Rent (Rental Income Tax Advisors)
Specialists in Landlord Taxation
Recommended tax advisors of the Residential Landlords Association
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clients (at) rita4rent (dot) co (dot) uk
I find your wording better but similar. It doesn't make sense, but you seem to be saying that LL with turnover over £85K need to keep digital records in order to prove that they don't need to pay VAT. Is that really the case? I'd hope not!
Going to the source.
Similarly, businesses that are not VAT registered and those below the VAT threshold who have voluntary registered for VAT can opt to join
The government has committed that it will not widen the scope of Making Tax Digital for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest.