The terms of the software development agreement – that will drive the collaboration between developers and HMRC were published today. Here.
The closing comments of the document caught my attention, they say:
Eligibility for free software will apply where the business meets all these conditions:
- they’re unincorporated (for example self-employed persons or landlords)
- they have a turnover, within the scope of MTDfB, below the VAT threshold
- they have no employees
- they use cash basis accounting
HMRC wouldn’t require free software to link or integrate with an Agent product
This would seem to imply two things:
- That HMRC will be encouraging smaller traders to use cash accounting, even if this results in a higher tax charge for businesses that can ill afford to lose cash flow, and
- The independence from agent software will further distance smaller businesses from seeking the professional advice that will help them develop their businesses. It fosters a DIY approach.