Relief as Making Tax Digital is delayed
10th August 2017
The accounting profession breathed a huge sigh of relief last month, as it was announced that the introduction of Making Tax Digital (MTD) is to be delayed.
The government gave numerous reassurances prior to the general election earlier this year, that there would be no delay to the introduction of MTD from April 2018. However, HM Revenue & Customs have now confirmed that only businesses with a turnover above the VAT threshold of £85,000 will have to keep digital records, and only for VAT purposes, starting from 2019. All other businesses will not be asked to make the switch to MTD until at least 2020.
This delay should give accountants sufficient time to communicate to their clients what MTD is and prepare them for its introduction. This will include advising clients on their new responsibilities, the record keeping they need to keep, assessing the software most appropriate for their needs and ensuring they remain compliant.
In recent years we have seen huge growth in the use of Cloud Accounting Software such as Xero. It is expected that this software will be compatible with the requirements for MTD. This should mean businesses already using this type of software won’t be overburden by the introduction of MTD. However, there are still a large number of businesses that will require moving to an acceptable format for record keeping and there will be a cost associated with this. It will be interesting to see how some cope with completing their books quarterly, when once a year is often a struggle.
Author: Luke Thomas, Director
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