Government-led Making Tax Digital plans have recently been revised to benefit three million small businesses and landlords.
The initial proposal had previously faced criticism from both MPs and business and professional bodies, including the National Landlords Association (NLA), as concerns were raised over how smaller businesses obtained and managed workable software and IT systems.
Since then, a new timetable has been announced and now, businesses under the threshold of £85,000 will not be asked to keep digital records until 2020 or be required to update the HMRC for other taxes on a quarterly basis.
As well as this, Making Tax Digital will be temporarily made available to businesses within the threshold on a voluntary basis, and HM Revenue and Customs (HRMC) has said it will offer additional help and support to those who may find the new software challenging.
Richard Lambert, chief executive officer of the NLA, said: “We are pleased that the Government has finally listened to the concerns raised by the NLA on behalf of landlords who would have been dragged into a system of tax reporting rushed into being before they or it are ready.
“While we have always supported simplifying the tax system, we were concerned by the issues raised by the Making Tax Digital programme, and welcome the changes.”
Supporters hope that the new system will create more benefits for taxpayers. For example, with digital records, a person gains the ability to see how much tax needs to be paid at any point in the year, without having to wait for their annual end of year tax return.