HMRC have announced significant changes to the timetable for the implementation of Making Tax Digital. We have previously written about HMRC‘s original plans for the implementation of Making Tax Digital, which would have come into effect from April 2018 for a number of businesses and landlords with gross income exceeding the VAT threshold (currently £85,000), and April 2019 for those below the threshold – however these timescales have now been relaxed.
Following HMRC’s newly reformed timetable, only VAT Registered businesses will be required to keep digital records from April 2019 – and only for VAT reporting purposes. The previous requirements for the reporting of other taxes quarterly to HMRC will not come into effect until at least 2020. This means businesses and landlords with turnovers below the VAT threshold will have at least 2 years before having to adopt a new digital system.
While the Government and HMRC are wholly supportive of MTD and the need to move to a more modern and streamlined system for the reporting of businesses tax affairs this is a significant slackening in the more imminent timescales that were previously expected. These changes have been well received by businesses and software providers alike who both recognise that more time is required to be able to make a comfortable transition to a new digital system of working.