Amended roll out dates for Making Tax Digital

 

The government has listened to concerns raised by parliamentarians, in particular the Treasury Select Committee, businesses and professional bodies about the pace of change and is taking steps to ensure a smooth transition to a digital tax system.

 

Making Tax Digital will help bring the tax system into the 21st century by providing businesses with a modern, streamlined system to keep their tax records and provide information to HMRC. Roll out for Making Tax Digital has been amended to ensure businesses have plenty of time to adapt to the changes.

 

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

 

Businesses will not now be mandated to use the Making Tax Digital system until April 2019 and then only to meet their VAT obligations. This will apply to businesses who have a turnover above the VAT threshold – the smallest businesses will not be required to use the system, although they can do so voluntarily.

 

The government has committed that it will not widen the scope of Making Tax Digital for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. This will ensure that there is time to test the system fully and for digital record keeping to become more widespread.