Making Tax Digital
The new timetable for the introduction of Making Tax Digital (MTD) has been confirmed with the publication of the second Finance Bill. The MTD regime was originally due to start from April 2018. However, there were significant concerns that the roll-out of the MTD was moving too fast and a new timetable for the introduction of MTD was announced earlier this summer.
The new timetable will allow more time for businesses, the self-employed and landlords to prepare for significant changes to the way they interact with HMRC in order to register, file, pay and update their information using an online tax account.
Under the new implementation plan 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 from 2019. Other businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until ‘at least’ 2020.
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 slow-down in the introduction of MTD 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.
We can help by offering you advice on the changes you will need to put in place to prepare for MTD including which software would be most suitable. Any of our readers who are still using manual record keeping systems will need to examine their options for moving to keeping fully digital records.
Source: HM Treasury | 13-09-2017