No more delays to Making Tax Digital for small businesses
18th October 2018 | News
Small Business Minister, Kelly Tolhurst MP has confirmed there will be no further delays to the roll-out of Making Tax Digital for freelancers and small firms.
Earlier this year, HM Revenue and Customs (HMRC) confirmed that “plans to introduce further digital services to individuals” were being delayed, with a pledge for a so-called “soft landing” to ease freelancers and small businesses into the UK’s new digital tax accounts system.
This was based on claims from a number of small business advisers that said many self-employed individuals and small firms still lacked awareness of Making Tax Digital.
The pace of the Making Tax Digital implementation was subsequently slowed, with HMRC committing to keeping all taxes other than VAT out of the digital tax system until at least April 2020.
Nevertheless, from 1st April 2019, one million businesses registered for VAT with a taxable turnover beyond £85,000 will be required to start filing VAT records digitally and submit their VAT returns using MTD-compatible software.
To help VAT-registered businesses migrate more easily to the Making Tax Digital system, HMRC has launched a new online pilot. The pilot has invited over 500,000 small firms to sample the digital platform before the new rules come into force next April.
The pilot initially began on a small scale in the spring, with a select group of firms successfully testing the platform. It has since been opened to sole traders and companies, provided they are up-to-date with their VAT obligations.
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 MTD and start filing their VAT returns online making it easier to get their tax right first time.
“More and more businesses use digital tools every day to help them operate – tax shouldn’t be different.
“This is a major step towards bringing VAT into the 21st century.”
HMRC is working with over 150 software suppliers who have confirmed that they will develop software for Making Tax Digital for VAT in time for April 2019.
Our partners, QuickBooks and TaxCalc are both committed to providing Making Tax Digital for VAT software to help small businesses – that are the backbone of the UK economy – to quickly adapt to changes in 21st century tax reporting.