HMRC has moved the launch date of the Making Tax Digital (MTD) for Business programme until at least 2020 in a move which will enable three million of the UK’s smallest businesses and landlords “move to the new digital system for keeping tax records at a pace that is right for them”.
HMRC had planned to mandate the use of digital tax records for businesses by April 2018, but concerns were raised that the deadline did not provide enough time for businesses to prepare.
As part of the changes, only businesses with a turnover above the VAT threshold (currently £85,000) will “have to keep digital records, and only for VAT purposes” from 2019, and businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes “until at least 2020”.
The government also said that MTD will be available on a voluntary basis for the smallest businesses, and for other taxes, and that it is “fully committed to supporting businesses in this transition”.
Mel Stride, Financial Secretary to the Treasury and Paymaster General says: “Businesses agree that digitising the tax system is the right direction of travel. However, many have been worried about the scope and pace of reforms. We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.”
The decision was welcomed by the Chartered Institute of Taxation, the Institute of Chartered Accountants in England and Wales and the Federation of Small Businesses.
At Beavis Morgan, we put processes in place which make it easier to run your business and to maintain effective management of your company’s working capital. We assist with management accounts, enabling better control of your financial situation and awareness of the business in real time, enhancing planning for the peaks and troughs, and making sure you always know how your business is performing.
Our tax experts at Beavis Morgan are available to discuss ways to make your tax return easier by taking the hassle of dealing with HMRC away from you, so you don’t need to contact them directly.
Contact Alan Ford or your usual Beavis Morgan Partner for further information and assistance.
Further reading: Big Brother is watching – 10 ways HMRC can detect tax dodges