Making Tax Digital delayed until ‘at least 2020’
14th July 2017
The government has just announced a delay to its Making Tax Digital (MTD) plans for an estimated 3 million small businesses and landlords.
Under the new timetable outlined by HMRC:
- only businesses with a turnover above the VAT threshold will have to keep digital records for VAT purposes (and only VAT) from 2019
- businesses and landlords will not be required to keep digital records, and update HMRC quarterly, for other taxes until at least 2020.
- as VAT already requires quarterly returns, no business will need to provide any more information to HMRC more regularly than they do now.
All businesses will have at least 2 years to adapt to the changes before being asked to keep their tax records digitally.
According to HMRC, Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes. 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.
These changes are expected to be passed through Finance Bill 2017, which is set to be announced sometime after parliament returns on 5 September 2017.
While we welcome the delay to allow businesses more time to adapt, this announcement still leaves a number of questions unanswered. HB&O’s tax team will be working with HMRC to establish greater clarity on who will be affected, how and when. Keep an eye on our blog and news updates for further details or call us on 01926 422292.