Just days after Small Business Minister Kelly Tolhurst said that businesses should not expect any further delays to Making Tax Digital (MTD), HM Revenue & Customs (HMRC) has made a surprise announcement.
In an MTD update published in recent days, the tax authority has announced a further delay to MTD for VAT, which will affect only a “small minority” of businesses that file more “complex” VAT returns.
While the majority of VAT-registered businesses earning above the VAT threshold of £85,000 will need to be MTD-compliant from 1 April 2019, businesses with “more complex requirements” will have until October before MTD is made mandatory, HMRC has confirmed.
“The deferral will apply to around 3.5 per cent of mandated customers,” a Revenue spokesperson said.
“These businesses have until 1 October 2019 to start keeping records digitally and using MTD-compatible software to send their VAT returns to HMRC.”
Nevertheless, HMRC has warned that for the remaining 96.5 per cent of customers, the 1 April deadline is fast-approaching – and businesses need to make adequate preparations to ensure they are able to transition smoothly ahead of time.
In recent days, HMRC has opened its MTD pilot, which will enable around half a million businesses to ‘trial’ MTD for VAT prior to its roll-out.
Mel Stride MP, Financial Secretary to the Treasury, said: “HMRC is transforming the tax administration so that it’s more effective, more efficient and easier for taxpayers.
“Today’s announcement means that around half a million businesses will be able to join Making Tax Digital and start filing their VAT returns online, making it easier to get their tax right the first time.”
If you need help or advice preparing for MTD, please get in touch with our expert team today.