18/07/2017
Qualifying businesses will have more time to make the transition to a digital tax system as HM Treasury has responded to concerns about the pace of change set by the ‘Making Tax Digital’ * project’s timetable for transition by extending it for 12 months for the second time this year.
HM Treasury has also confirmed that three million of the smallest businesses and landlords will be able to move their tax records and reporting into the digital age at their own pace. ‘Making Tax Digital’ will be available for them on a voluntary basis as it becomes available for larger businesses.
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
- and they will only need to do so from 2019
- businesses will not be asked to keep digital records, or to update HM Revenue & Customs quarterly, for other taxes until at least 2020
‘Finance Bill:Written statement – HCWS47’ confirms that legislation relating to ‘Making Tax Digital’ will be included in a Finance Bill, which will be introduced as soon as possible after the summer recess. The Bill will include all the policies in the pre-election Finance Bill and projects originally announced to start from April 2017 will be effective from that date.
* ‘Making Tax Digital’ aims to do away with the annual return by enabling businesses to provide HM Revenue & Customs with regular updates for multiple taxes at the touch of a button as part of their normal operations.