Making Tax Digital – November 2017 Budget Report
The government is phasing in its landmark Making Tax Digital (MTD) initiative, which will see the introduction of a fully digital tax system, with businesses and individuals being required to register, file, pay and update their information via a secure online tax account.
The new system was originally intended to be implemented between 2018 and 2020. However, following concerns raised by business and industry experts, the government put forward a revised timescale for its introduction.
Under the new timetable, from 1 April 2019 businesses with a turnover above the VAT threshold (currently £85,000) must keep digital records for VAT purposes and provide their VAT return information to HMRC using MTD functional compatible software. Keeping digital records and making quarterly updates will not be mandatory for taxes other than VAT before April 2020, although businesses below the VAT threshold which have voluntarily registered for VAT can opt to join the scheme.
The government plans to make the necessary regulations available no later than April 2018. HMRC will be piloting MTD for VAT for the rest of 2017, with wider live piloting planned from Spring 2018.