A Welcome Delay for Making Tax Digital

The government today announced a welcome delay to Making Tax Digital (MTD).

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

The original plan would have forced small businesses and landlords to report their finances to HMRC quarterly from April 2018.  Given that little information has been forthcoming as to what will be required, the timescale for that would have been difficult for many businesses to meet, and most likely caused problems for HMRC.

The Treasury document states that:

  • 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; and
  • businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.

We still need to be prepared for digital record-keeping and quarterly reporting, and the full-blown MTD is expected to be in place by 2020.   For help with digital record-keeping, please get in touch.