Government delays plans to ‘Make Tax Digital’
Recent treasury announcements mean that businesses now have longer to prepare ahead of the proposed shake up of the tax system.
The new timetable shows that only businesses with turnover above the VAT threshold (currently £85,000) will need to keep digital records and will come under the Making Tax Digital (MTD) regime in 2019, with other businesses coming under MTD in 2020.
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 2019.
· Businesses will not be asked to keep digital records, or update HMRC quarterly, for other taxes (income tax and corporation tax) until at least 2020.
· MTD will be available on a voluntary basis for the smallest of businesses, and for other taxes.
Many business owners will breathe a sigh of relief at the delay but there are valid commercial reasons to make the move to digital accounting sooner rather than later in today’s competitive marketplace. Having easy access to up-to-date digital financial information helps to ensure that when business opportunities arise they can be exploited in a timely manner and executed in a way suitable to that business’ financial position.