After months of uncertainty, HM Treasury have announced a revised timetable for Making Tax Digital (MTD).
Under proposals originally announced by George Osborne, all but the very smallest businesses, including landlords, would have been required to keep their accounting records digitally and to make quarterly submissions of information to HMRC from as early as April 2018.
Following significant lobbying from the accountancy profession and a shift in political priorities, this ambitious timetable has been revised.
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.
- No additional quarterly reports will be required for income tax or other tax purposes until at least 2020.
In other words, in this initial phase of MTD, the only businesses who will be compulsorily required to keep their accounting records in a digital format from April 2019 are those who are already submitting quarterly VAT returns. This will include sole traders, partnerships, trusts, limited companies and landlords with commercial property portfolios.
We believe that, despite the government applying the brakes to a full roll out of MTD, digital record keeping will become compulsory for most businesses in the not too distant future. The impetus created by the original timetable has resulted in accelerated software development which offers potential efficiencies from which all businesses may benefit.
We will be contacting clients over the coming months with a view to discussing a personalised plan of action.
In the meantime, be wary of anyone offering “free” software or apps which claim to deal with MTD. We believe these products are not fit for purpose and are an elaborate marketing ploy to bombard you with adverts to buy other products.