HMRC: Putting the Brakes on MTD
HMRC buckled under the pressure with their Making Tax Digital project and have delayed the implementation by a minimum of 2 years until 2020 – but are we out of the woods yet?
Making Tax Digital (MTD) is a plan devised by HMRC to get every business and sole trader to report their accounts on a more regular basis in an electronic format – much like the way we file most VAT returns today. HMRC received a lot of backlash about this since it required everyone to use some form of computerised accounting system or spreadsheet to record their data and many of them were not already doing that. The initial plan is listed in our previous article and saw mandatory filings beginning in April 2018.
HMRC comments that they “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” .
This now has resulted in a postponement of at least 2 years until 2020. This is good news for everyone not yet using a computerised system as it gives them all more time to consider all the options and start the change.
VAT registered businesses (those with a turnover of more than £85,000) will still have to start their electronic filing from 2019. These businesses already have to file on a quarterly basis – therefore the only change here is that the returns will only be acceptable in an electronic format form then on. For most businesses, this is already in place. This part of the project is for VAT purposes only at this stage.
In summary then, good news if you’re not on a computerised system yet – perhaps we can help you with some options in moving into electronic systems? You may be surprised to see how much of the admin can be automated these days. Watch out for our case-studies coming soon.
For everyone else, it’s business as normal.