Plans to Digitalise tax have been put back
The Government have announced significant changes to the (making Tax Digital) MTD timetable, effectively deferring MTD until at least 2020, although digital records will need to be kept in support of VAT returns from April 2019.
There is also a suggestion MTD will not be compulsory for smaller businesses, at least to begin with anyway.
Under the new timetable:
- Only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes
- They will only need to do so from 2019
- Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020
- 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.
As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.
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.