The government has listened to both business and the profession.
They have agreed that businesses will not be mandated to use the MTD system until April 2019, and even then they will only have to use it to meet their VAT obligations.
It will only apply to businesses that are mandatorily registered for VAT – ie with vatable turnover above the VAT threshold – currently £85,000. Such businesses will have an obligation to keep digital records for their VAT.
MTD will not be widened beyond VAT until at least 2020, once the system has been shown to work.
It is good news for a lot of small businesses as businesses with turnover below the VAT threshold, but above £10,000, will not be required to use the system until 2020 at the earliest. They can voluntarily use it if they wish.
MTD legislation will be included in the 2nd 2017 Finance Bill, due in the autumn.
I will report further then.
Debbie Wicks
Friston Wicks Chartered Accountant and Chartered Tax Adviser