Making Tax Digital – hurrah, common sense prevails

Source: HM Government | | 20/07/2017

A new timetable for the introduction of Making Tax Digital (MTD) has been announced. The new regime was due to start from April 2018, but has been delayed by up to two years. The government appears to have listened to concerns that the roll-out of MTD was moving too fast and should be phased in more gradually. The original proposals would have required most businesses to upload quarterly figures to HMRC starting next April.

Under the new implementation plan these obligations have been substantially changed. They are:

  • Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes. These businesses will only be required to use MTD compliant upload software from April 2019.
  • Other businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes (Income Tax and Corporation Tax) until ‘at least’ April 2020, and only if their annual turnover is above the VAT registration threshold.
  • HMRC has also confirmed that the use of MTD by smaller businesses and for other taxes will be voluntary. This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system. 

As VAT returns are already submitted on a quarterly basis, the change of pace of MTD implementation means that all businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.

HMRC’s MTD pilot tests will be extended to pilot MTD/VAT for businesses later this year, with a more extensive testing phase starting in the Spring of 2018. This means that there will be far more time to test the system and iron out any issues before the system goes live.

Hurrah!

 

Latest News

Search


Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login