A new timetable for the Making Tax Digital initiative has been set out by the government. The changes will be legislated for as part of the Finance Bill 2017.
Under the new timetable:
Making Tax Digital will be available on a voluntary basis for the smallest businesses, and for other taxes.
This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.
As VAT already requires quarterly returns, no business will need to provide information to HMRC more regularly during this initial phase than they do now.
All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.
Mel Stride, financial secretary to the treasury and paymaster general said: “Businesses agree that digitising the tax system is the right direction of travel. However, many have been worried about the scope and pace of reforms.
“We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.”
The government also confirmed that the Finance Bill will be introduced as soon as possible after the summer recess. All policies originally announced to start from April 2017 will be effective from that date.