It took the Government a while but they eventually listened to the professional bodies and tax experts that the public is not ready for Making Tax Digital (MTD).
We welcome this new announcement and we are sure that a lot of our clients will also be pleased with it.
The new MTD timetable is as follows:
- From April 2019, only businesses with a turnover over the VAT threshold (currently £85,000) will have to keep digital records but only for VAT purposes.
- For other businesses, this will be delayed until at least April 2020.
It does, however, beg the question, is this announcement to cover up the fact that HM Revenue and Customs (HMRC) systems are nowhere near ready for MTD? Our client, thePotentMix, is one of the volunteers for the MTD pilot software. When he spoke to his software supplier (FreeAgent), he found he was unable to submit the first quarterly return, to which the software provider commented “….that there wasn’t any real conclusion from the HMRC side.” However, having then spoken to HMRC, he was told that the intention is very much that the quarterly returns are part of the pilot, but that FreeAgent does not yet have the facility to allow them to be made! He currently awaiting a response from FreeAgent on this. Furthermore, after his conversation with HMRC, it transpires that there is actually HMRC software in beta and he has asked to be allowed to be part of that aspect of the trail. The main reason for the pilot is to test the system, and this cannot be done if the volunteers are not able to submit the quarterly returns, so once we have a further update from our client we’ll keep you informed as to what is happening. At present, it seems a bit confused!
This is far cry from when the Government first announced its plans for MTD in the 2015 Budget, thus proposing to abolish the tax return for many taxpayers as we currently know and love it from April 2017. The implementation date for MTD had already been delayed as announced in the recent budget and now we see this slip a further year.
For further detail on MTD and to see just how much this particular Government initiative has slipped, see our previous articles on our website at http://msactax.co.uk/making-tax-digital/.