Small Businesses: Taxation

(asked on 20th September 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential impact of the Making Tax Digital reforms that require separate (a) records and (b) tax return submissions for each business on people with multiple small businesses who earn below the income tax threshold; and if he will make an assessment of the potential merits of allowing those people to (i) submit a single tax return and (ii) utilise only one paid software subscription for all of their businesses.


Answered by
Richard Fuller Portrait
Richard Fuller
This question was answered on 28th September 2022

As is currently the case for Income Tax Self Assessment, taxpayers will need to maintain separate records for each business that they operate, but under Making Tax Digital (MTD) these will need to be digital. This ensures that businesses maintain accurate records to support the updates and returns they make to HMRC.

Making quarterly updates through MTD compatible software is not the same as making quarterly tax returns and no accounting or tax adjustments are needed for these updates. Taxpayers will be able to submit these updates for each business directly from their digital records through the software.

HMRC expects a range of third-party software will be available to taxpayers and that many products will cater for users with multiple business income sources.

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