Substantial changes to Making Tax Digital announced

tax time_13263Substantial changes to the proposed Making Tax Digital regime have been announced, following a concerted lobbying effort by the NFU.

More businesses will be exempt, the scheme will start with VAT reporting only and implementation has been delayed.

The new Financial Secretary to the Treasury, Mel Stride MP, outlined new plans in a ministerial statement last week. Concerns had been raised by the Treasury Select Committee, parliamentarians and stakeholders, the minister said.

The main changes to the proposals are:

  • 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 2020.
  • Amended legislation for Making Tax Digital will be included in the Summer Finance Bill, which will be published shortly after the parliamentary recess. HMRC plans to pilot Making Tax Digital for VAT by the end of this year, starting with small-scale private testing, followed by a wider, live pilot starting in spring 2018.

The NFU view

The NFU has for some considerable time highlighted its concerns over the impact for members of the government’s Making Tax Digital proposals. The NFU has responded to consultations, taken part in stakeholder meetings and events and given evidence in Parliament.

We have called for wider exemptions and a longer timescale for implementation, which was due to go live from April 2018. We therefore very much welcome these changes. The NFU will continue to engage fully with HMRC on Making Tax Digital for businesses, including on draft legislation and the live pilot.

  • Posted by: stephen NorrisPosted on: 26/07/2017 18:48:48

    Comment: they need to get reliable board band to rural areas first. Talk about putting the cart before the horse!
  • Posted by: Alan R Burkitt F W Burkitt & SonPosted on: 27/07/2017 10:19:06

    Comment: We are purely arable, growing crops which rotate on a yearly basis. How can we produce quarterly accounts without a lot of guesswork. ( Sorry estimation ) We do out vat quarterly.