This is the UK Government’s ambitious plan to require all businesses to submit information digitally to HM Revenue & Customs ("HMRC") directly from their accounting software every quarter.
It was originally intended to be introduced in 2018. However, it has been postponed for corporate and income tax filing until April 2020 and for VAT filing until April 2019.
The Government will introduce legislation to require a business trading over the VAT registration threshold (currently £85,000 p.a.) to retain its records digitally and provide information to HMRC at least quarterly commencing in April 2019.
There will be a live pilot scheme starting in March 2018 in order to enable more than a year of testing before any business is required to adopt the arrangement.
The postponement of MTD has been welcomed by most businesses, as it will require significant preparation and new accounting systems to be put in place to ensure compliance under the new regime. Further announcements will follow regarding the VAT accounting requirements which are expected to include comprehensive details covering all business transactions (i.e. all sales and purchase) to support the figures contained in the quarterly VAT returns.