On the 13th July 2017, the Government confirmed a new “Making Tax Digital (MTD)” timetable.
It is now confirmed that from April 2019, businesses with a turnover above the VAT threshold (currently £85,000) will need to keep digital records for VAT purposes.
Businesses below the VAT threshold will now be exempt from requirements for quarterly reporting until the Government can reassess the plans. This is likely to be after the current pilot and before 2020.
MTD will be available on a voluntary basis for the smallest businesses, and for other taxes. Businesses and landlords with a turnover below the VAT threshold will be able to opt to use the new digital reporting system but it will not be mandatory until 2020 at the earliest.
The Treasury document states that 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;
- they will only need to do so from 2019; and businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least 2020.
Even with this delay there are compelling reasons for clients to convert to the Cloud. Businesses benefit from faster input of their data and the ability to see real time financial information to help with decision making. Accountants benefit from having their clients on the same platform, which leads to faster production of tax and statutory information, giving more time for advice.