As widely predicted following the outcome of the election, the timetable for Making Tax Digital has been pushed back. In an announcement today, the government confirmed:
- only businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and then only for VAT purposes
- they will only need to do so from 2019 (previously 2018)
- 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 smaller 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.
The government also confirmed that Finance Bill will be introduced as soon as possible after the summer recess. This will include all the policies that were included in the pre-election Finance Bill.