The new timetable means businesses will not be required to maintain digital accounting records until at least April 2019. From April 2019, businesses with turnover above the VAT threshold will be required to maintain digital accounting records and to use these digital records to meet their VAT-filing obligations. The current online VAT return will cease to be an option for businesses with turnover above the VAT threshold. Business who have voluntarily registered for VAT will not be required to use MTD to comply with their VAT obligations until at least 2020.
This is welcome news: the government has listened to both business and the profession. The Institute of Chartered Accountants in England and Wales (ICAEW) has said all along that it supports the move to digital in principle, but it should not be mandatory or impose unreasonable admin burdens, and its introduction should allow enough time to ensure the system works. Removing mandation for the smallest businesses until at least 2020 is a welcome step forward and one less regulatory burden for SMEs to worry about.