Plans to force landlords to file quarterly digital tax reports from 2018 have been scrapped… for now.
Making Tax Digital (MTD), along with a further 72 out of 135 total clauses, were removed from the Finance Bill in order to rush important tax legislation through parliament before June’s snap election.
MTD would have seen landlords, self-employed workers and business owners file up to four digital tax returns per year, starting from April 2018 for income tax payers who earn more than the VAT threshold (£85,000).
Income tax-paying Landlords earning less than the VAT threshold would have to use digital tax from April 2019, while those earning less than £10,000 would be exempt completely.
Landlords who operate through a limited company would be required to use MTD from April 2019 if they pay VAT, and from April 2020 for corporation tax.
While Making Tax Digital will almost certainly make a comeback following the general election, it is not known whether the delay will impact on the launch dates.
The National Landlords Association (NLA), however, welcomed the deferral.
“This unintended delay, for a policy that gives us plenty of cause for concern, will enable proper scrutiny post-election and hopefully some further revisions to ease the impact on landlords,” it said.
“Our view that we put across in the initial consultation is that the £10,000 turnover threshold for mandating the digital record keeping was too low and this has not changed yet.
“The Treasury Select Committee also found that such a low threshold was universally considered to be unacceptable, and agreed with our recommendation that it be permanently raised to the VAT threshold (currently at £85,000).”
RDP Newmans offers a range of digital tax services through its cloud-based accounting system, RDP Cloud.
To learn more about Making Tax Digital and how RDP Cloud can benefit you, click here.