Jane Ellison MP, finance secretary to the Treasury, has confirmed that the roll-out date for Making Tax Digital (MTD) will be pushed back for the majority of businesses.
SMEs will now have until 2019 (previously 2018) to prepare for the tax overhaul.
The MP has clarified that this update will only affect small and medium-sized enterprises (SMEs), leaving the remaining unincorporated businesses and buy-to-let landlords to prepare for the original date of 2018.
“We are consulting on the detail and considering the case for providing further financial assistance to help businesses transition to Making Tax Digital for business,” added a HM Revenue and Customs (HMRC) spokesperson.
The Government has also agreed to exempt a significant proportion of micro-business and sole traders, whose earnings amount to less than £10,000.
They said they had listened to representations made by stakeholders and recognise that some of the smallest businesses may find it difficult to make the transition to the new MTD requirements.
“As a result the Government has now announced that it will remove a further 1.3m of the smallest businesses from the scope of the changes by exempting all unincorporated businesses with annual turnover of less than £10k from digital record keeping and quarterly updates, although they will be able to choose to do so If they want to.”