Following feedback and concerns raised by parliamentarians, businesses, accountants, and professional bodies, HMRC has delayed Making Tax Digital for most businesses by one year.
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.
All other businesses and landlords will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
Alan McCappin, Practice Manager at Bradleys, said:
“HMRC did the sensible thing. The delay gives businesses, HMRC, software developers and accountants, time to ensure that MTD rolls-out more smoothly. For starters, software products can be better developed and HMRC will have more time to pilot quarterly reporting.”
Summary of what the delay means for businesses, landlords and self-employed individuals
- Starting with small scale pilot testing for VAT by the end of this year, HMRC will run a wider pilot in spring 2018.
- Only VAT-registered businesses with a turnover of the current threshold of £85,000, will be mandated to keep digital records
- All other businesses and landlords (over the VAT threshold or under) will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.
- Corporation tax for all companies will be digitally reported by 2020.
- Small businesses with an annual turnover between £10,000 and £85,000 will be able to file digitally on a voluntary basis for other taxes.
If you would like us to help you through these changes then call us today on 020 8303 1287 or fill our enquiry form here to arrange a free initial consultation.