HMRC has backtracked on its timetable to move all small businesses to digital record keeping. Making Tax Digital has been delayed to 2020 at the earliest for taxes other than VAT.
Making Tax Digital (MTD) is an HMRC initiative to access tax affairs online via Digital Tax Accounts.
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
* businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes until at least
* Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes.
This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.
As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.
All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.
If you want us to help understanding what this means to you please contact us.