Responding to this afternoon’s Written Ministerial Statement on Making Tax Digital (MTD),1 Adrian Rudd, Chair of the joint CIOT/ATT Digitalisation and Agent Strategy Working Group, said:
“The Spring Statement has put beyond doubt that MTD for VAT will go ahead as planned from 1 April 2019. Anyone holding out for a last minute reprieve due, for example, to Brexit uncertainty, will need to focus on this urgently.
“While the Government confirmed it will apply a ‘light touch approach’ to late filing and record keeping penalties in the first year of MTD, it still expects businesses to do their best to comply with the requirements, so the light touch may not benefit businesses who make no attempt to apply MTD.”
The Government also confirm today that MTD would not be extended to other taxes or businesses in 2020.
Adrian Rudd said:
“We welcome the announcement that, in practice, MTD will not be further extended until at least April 2021, either to bring income tax within the scope of MTD, or businesses who are voluntarily registered for VAT. This delivers on the Tax Minister’s promise that the Government will not widen the scope of MTD beyond VAT before the system has been shown to work well.”2
While 1 April is just 19 days away, the CIOT cautioned businesses against signing up before they are ready.
Adrian Rudd said:
“While some of the requirements of MTD apply from 1 April 2019, this is not the deadline for enrolling into MTD. For many businesses the deadline for signing up may be nearer the beginning of August 2019. Businesses need to enrol into MTD for VAT at the right time, and only when they are confident that they can submit their next VAT return using MTD-compatible software, otherwise significant problems can arise. We have produced a guide to the sign up ‘windows’, to help businesses transition into MTD as smoothly as possible.”3
Notes to editors