HMRC delays MTD for business due to Brexit

HMRC is to continue rolling out Making Tax Digital (MTD) for VAT but has warned that the wider extension of the MTD programme for businesses will be delayed as IT developers are refocused on Brexit customs delivery

Plans to widen MTD for businesses beyond a limited group of taxpayers and businesses are to be slowed in order to allow HMRC to spend more time working with developers so that it can be certain of meeting the requirements of more businesses with more demanding needs.

The inclusion of businesses with complex requirements is to be delayed, and HMRC has said that its digital delivery team and business analysis team are being redeployed to focus on ensuring that a customs solution will be in place should it be required when the UK leaves the EU on 29 March 2019. HMRC has stressed that ‘this does not indicate any expected outcome but is due to the level of work required to deliver any outcome’. The current make-up of the support teams HMRC provides in relation to delivering MTD are unlikely to change.

However, the programme for MTD for businesses will remain unchanged for unincorporated landlords, and more than a million self-employed persons with ‘simple tax affairs’, who are already eligible to join the programme. This also includes the delivery of the income tax pilot for those already involved.

HMRC has also confirmed that MTD for VAT will continue as planned, with businesses with a turnover of £85,000 or more being required to keep digital records from 1 April 2019.

An HMRC spokesperson said: ‘We have always been clear about needing to make tough choices so we can meet our EU exit responsibilities.

‘Delivery of MTD for VAT is continuing as planned, but we are slowing the IT delivery of some other elements of MTD relating to income tax and corporation tax. We will continue to complete the income tax service for the million customers who are eligible to join.’

Report by James Bunney

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Comments

"HMRC has also confirmed that MTD for VAT will continue as planned, with businesses with a turnover of £85,000 or more being required to keep digital records from 1 April 2019". Therein lies a big issue, it should be businesses with taxable sales over the £85K limit - But HMRC has no way of knowing whether a business with say £100K turnover has £60k standard rated sales and £40k Exempt.

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