Under MTD, businesses will need to report their profits quarterly using suitable digital software. Quarterly reporting is due to come into effect for income tax and national insurance purposes from April 2018, VAT from April 2019 and corporation tax from April 2020.
For businesses below the VAT threshold, quarterly reporting has been postponed until April 2019.
The MTD timetable is now:
2018 – all unincorporated business above the VAT threshold (except large partnerships – turnover above £10m)
2019 – all businesses and landlords with annual turnover in excess of £10,000
2019 – VAT
2020 – Corporation tax and large partnerships
The delay to introduce quarterly reporting for the smallest businesses is welcomed.
A pilot scheme is being run from April 2017 until April 2018 so it is practical that sufficient time is allowed to examine the outcome of that pilot, especially where the smallest businesses and landlords are concerned.