A LOWTAX NETWORK INTERNATIONAL BUSINESS SMART TOOL
HOME ABOUT ONLINE GIG TOOL JURISDICTION INFORMATION PROVIDERS ARTICLES & FEATURES

UK's Making Tax Digital Initiative To Cover Only VAT Until 2021

Jason Gorringe, Tax-News.com, London

26 March, 2019

British businesses have welcomed confirmation from the UK Government that Making Tax Digital will not be rolled out to other taxes and more businesses in 2020.

Under MTD, from April 1, 2019, businesses with a turnover above the VAT threshold (currently GBP85,000, or about USD110,000) will have to: keep their records digitally (for VAT purposes only), and provide their VAT return information to HM Revenue and Customs (HMRC) through MTD-compatible software. HMRC launched a limited pilot of MTD in 2018 but has now opened the pilot to all businesses affected by the change. In addition, in October 2018, HM Revenue and Customs announced a six-month delay, until October 2019, for certain businesses with complex affairs.

Earlier the UK Government committed to only broadening the initiative to cover digital record-keeping and quarterly reporting for small businesses and landlords for income tax purposes from at least April 2020.

Given the burden on businesses of responding to the UK's departure from the European Union, the UK's Chancellor, Philip Hammond, has said there will be a light touch approach to penalties in the first year of implementation. Specifically, he said "where businesses are doing their best to comply, no filing or record keeping penalties will be issued."

He announced: "The focus will be on supporting businesses to transition and the government will therefore not be mandating MTD for any new taxes or businesses in 2020."

It is expected that Making Tax Digital will now be expanded to cover companies' income tax affairs from April 2021 at the earliest.

TAGS: tax | small business | business | value added tax (VAT) | United Kingdom | HM Revenue and Customs (HMRC) | penalties | HM Revenue and Customs (HMRC) | Europe | Tax |

 

 

SHARE

Share on FacebookTwitter
linkedin share buttonstumbleDeliciousEmail

FOLLOW

FacebookTwitterGoogle+LinkedInTechnorati

Important Notice: Wolters Kluwer (BSI) Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.

All rights reserved. © Wolters Kluwer (BSI) Limited