Delay to Making Tax Digital is welcome – but firms still need to be ready for the digital revolution
Government has caved in to pressure and is modifying and delaying its Making Tax Digital project but Liverpool accountancy boss Peter Taaffe of BWM says change is still inevitable. Tony McDonough reports
Small businesses across the Liverpool city region worried about plans to force them to file quarterly digital tax returns can rest easy – for now.
The Government has caved in to pressure and is modifying and delaying its Making Tax Digital (MTD) project.
But leading Liverpool accountant Peter Taaffe, managing partner of BWM, warns firms of all sizes that the digital tax revolution is inevitable and the time to start preparing is today.
In recent days the Government has said that some 3m of the smallest enterprises, as well as landlords, will be able to move onto digital tax filing “at a pace that is right for them”.
Under the new rules, only businesses with a turnover above the VAT threshold, currently £85,000, will have to keep digital records, and only for VAT purposes.
They will only need to do so from 2019. And businesses will not be asked to keep digital records, or update the taxman quarterly, for other taxes until at least 2020.
MTD was due to be rolled out next April, with pilot schemes already under way.
The proposed scheme is forcing a significant behavioural shift for business owners and self-employed people, who would need to file tax returns six times a year, as opposed to just once a year at present.
BWM is making a name for itself as a pioneer of digital accounting and is already working to prepare their clients for the shift.
They have developed strong relationships with leading software providers and are Platinum Partners of Quickbooks Online.
Mr Taaffe said: “We have long been concerned that the Government was pushing ahead too hard and too fast with MTD, as too many businesses are simply not geared up for the change.
“This latest modification and delay to the plan will provide an opportunity for businesses to make sure they are properly prepared.
“However, this is going to happen at some point and every business and self-employed person in the UK is going to have to face up to the challenge.
“There are major benefits of embracing the opportunity offered by cloud accounting as a matter of routine.
“We would urge all businesses to make sure they are ready when it arrives. The time to start preparing is right now.”