Changes to implementation date for Making Tax Digital
Since our recent update on Making Tax Digital for Business (MTD), the government has announced a revised timetable for its introduction.
Unincorporated businesses, including landlords, were expected to be the first to see significant changes, but the government has announced a delay to the implementation of the new rules.
The new timetable is being introduced following concerns raised by the Treasury Select Committee, businesses and professional bodies. The government have confirmed that under the new timetable:
- Businesses will not be required to use the Making Tax Digital for Business system until April 2019 Those with a turnover above the VAT threshold will then be expected to use it to meet their VAT obligations.
- These businesses will be able to provide quarterly updates for other taxes too, but there will be no mandatory requirement to do so. Businesses that are not VAT registered and those below the VAT threshold who have voluntarily registered for VAT can opt to use the system.
- The government 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.
Other parts of the Making Tax Digital project will continue. In particular, the objective of bringing together each individual taxpayer’s information in one place online – their Personal Tax Account. From April 2018, banks and building societies will be required to report information to HMRC earlier and more frequently than before. This information will feed into the Personal Tax Accounts so HMRC can estimate tax liabilities.
For the time being, there is no immediate action required with regards to MTD for business and we will be monitoring the situation to let you have any updates in future.
If you haven’t already, please setup your Personal Tax Account as this will contain vital information for your tax returns going forward. You can access or setup your account here: https://www.gov.uk/personal-tax-account
For advice on managing the effects of Making Tax Digital contact Yogi Dhanak.