Spring Statement: No MTD mandations to take place in 2020
13 March 2019
This year’s Spring Statement won’t even turn out to be the most significant event in Parliament today, given the ongoing discussions over Brexit. However, news that there will be no further mandation of Making Tax Digital (MTD) until 2021 will come as great relief to many businesses and individuals alike. The implementation of MTD for VAT (MTDfV) reporting requirements, for VAT-registered businesses with VAT-taxable turnover exceeding £85,000 remains unaffected, and will be rolled out from next month.
For those businesses affected by MTDfV, the ongoing pilot has been progressing well, according to HMRC. The Government has also confirmed that a light touch (soft-landing) approach will be taken in respect of penalties between now and April 2020, and no penalties will be applied to businesses that are doing their best to comply.
There are other pressures affecting businesses over the next twelve months, including the impact of Brexit, preparations for the extension of IR35 rules to the private sector from April 2020, and punitive business rates squeezing the High Street. Therefore, news that MTD for income tax will not be an issue at least for the next two years, is one less thing for them to worry about.
Brian Palmer, tax policy expert, AAT
