Making Tax Digital has been described as the biggest change in the way tax is assessed and collected in the UK in a generation with the Treasury allocating some £1.3bn to implementing it . This massive project was due to start in April 2018 with compulsory online filing of quarterly returns for many business owners and private landlords.
BUT ….. with the time constraints placed on Ministers by the recent General Election and the Brexit negotiations, not to mention the vociferous representations of the professional bodies, agents and Treasury Select Committees, the Government has now made a dramatic U-turn.
On 13th July 2017 a new MTD timetable was announced, under which;
• 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 onwards
• Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
• Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes.
• All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes. (Such as income & corporation taxes.)
This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system and, as VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.
We at Thomas Westcott are fully committed to supporting all our clients through these changes and will be looking very closely at the new legislation when it is published later this year. We welcome this relaxation of the timetable for MTD and believe that this means there is a much higher likelihood of a successful launch.
The full wording of the Government’s announcement can be read HERE
If you have any questions in the meantime please contact your usual Thomas Westcott team member.
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