New Timetable for Making Tax Digital (MTD)

27th July 2017

In response to concerns raised by the accounting sector, the government, whilst still wholly supporting the MTD initiative as a necessary move to modernise and streamline the tax system, recognises the need to give more time for businesses to make the transition to digital.  It has now confirmed the following under the new timetable:

· Businesses will not now be mandated to use the Making Tax Digital for Business system until April 2019 and then only to meet their VAT obligations. This will apply to businesses who have a turnover above the VAT threshold (£85,000).

· These businesses will be able to provide quarterly updates for other taxes too, but there will be no mandatory requirement to do so. Similarly, businesses that are not VAT registered and those below the VAT threshold who have voluntary registered for VAT can opt to use the system.

· The government will not widen the scope of Making Tax Digital for Business beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. This will ensure that there is time to test the system fully and for digital record keeping to become more widespread.

The government also confirmed that the Summer Finance Bill will be introduced following the summer recess, which concludes on 5 September. The bill will legislate all policies outlined in the pre-election Finance Bill, and all policies originally due to come into force in April 2017 will be effective from that date.