Making Tax Digital (MTD) – Latest Update!

HMRC have announced a new timetable for Making Tax Digital which will mean that the smallest businesses and landlords will not be made to move to the new digital system for keeping records until a much later date in the future.

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 April 2019
• 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.

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.

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.

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.

These changes will be legislated for as part of the Finance Bill 2017.

Changes to VAT reporting will come into effect from April 2019. From that date, businesses above the VAT threshold have to provide their VAT information to HMRC through Making Tax Digital software.

If you have any queries on MTD please contact either:

Maxine McIntosh mm@rayneressex.com or Mark Moore mark@rayneressex.com