Making Tax Digital

October 3, 2017

 

 

Three million of the smallest businesses and landlords will be able to move to the new digital system for keeping tax records at a pace that is right for them.

The government has listened to concerns and is taking steps to ensure a smooth transition to a digital tax system.

MTD 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 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

MTD 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.

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