Last month the British government announced that the start date for automated reporting of quarterly accounts information for income tax is being deferred until April 2020. Businesses had been due to begin quarterly reporting to HMRC from April 2018. These changes reflect requests by this Institute to allow firms more time to prepare, and Chartered Accountants Ireland recommends that preparations should continue for the revised timetable.

Under the revised timetable:-

• From April 2019, only businesses with turnover above the VAT registration threshold (currently £85,000) will have to keep digital records, and only for VAT purposes;
• Businesses will not be asked to keep digital records, or to update HMRC quarterly, for other taxes, until at least 2020.

MTD will be available on a voluntary basis for the smallest businesses and for other taxes. Businesses with turnover below the VAT threshold will not be required to use the system but can choose to do so if they wish. Businesses will also be able opt in for other taxes.

HMRC has also announced that it will start to pilot MTDfB for VAT by the end of this year, starting with small-scale, private testing, followed by a wider, live pilot starting in Spring 2018. This will allow over a year of testing before any businesses are mandated to use the system.

The MTD legislation will be included in Finance Bill (No 2) 2017, due to be introduced in the autumn. In its various submissions on MTD, the Northern Ireland Tax Committee had advocated that the project timetable be revised and the start date pushed out to allow the changes to be better phased to assist business, HMRC and software providers in properly considering the scale and impact of the proposals. The Committee had also pushed for business below the VAT registration threshold to be completely exempted from the proposals. Both these recommendations have now been implemented.

Following the huge amount of work the Institute and the Northern Ireland Tax Committee has put into our representations in this area, we are very pleased that the concerns raised have been listened to.