A new timetable has been confirmed for Making Tax Digital (MTD) as Ministers outlined the next steps for the Finance Bill.
MTD was supposed to go live from April 2018, but due to the uncertainty surrounding the government following the snap election earlier this year, HMRC has decided to push the movement back.
The key details are as follows:
- From 2019, only businesses with a turnover above the VAT threshold will have to keep digital records and only for VAT purposes.
- Businesses will not be asked to file their records digitally or update HMRC for other taxes until at least 2020.
- Smaller businesses will be able to voluntarily file records digitally.
HMRC will begin to test MTD for VAT by the end of 2017 on a smaller, private basis. By spring 2018, this will be increased to a wider system. This will allow for well over a year of testing before any businesses are required to use MTD.
The delay in rolling MTD out will allow businesses to fully prepare and ensure they are given adequate time to adapt to new methods of compliance record-keeping.
Once fully operational, MTD will streamline the tax system and help to bring it into the modern era.
More information will be released as soon as it becomes available, but in the meantime if you have any questions or would like to know more about MTD and what it means for you, please contact one of our team.