As a result of the number of responses which expressed a concern for businesses moving away from the use of spreadsheets; HMRC have confirmed that they can continue to use spreadsheets for record keeping. But they will be required to use some sort of software to submit their quarterly submissions to HMRC and that invoices and receipts do not need to be stored digitally.
They also confirmed that they will continue to accept 3 line accounts under making tax digital (MTD) for businesses with a turnover below the VAT threshold (currently £83k but being increased to £85k).
Due to the feedback HMRC received from the consultation they have agreed that Charities are exempt from making tax digital (MTD) for the time being. They have also deferred Partnerships with a turnover above £10 million until 2020 to coincide with corporation tax.
There was an overwhelming negative response to the initial exemption threshold of £10k and HMRC have stated that this is still under consideration, but a decision on this will have to be made soon.
Interestingly HMRC published an updated impact statement which says that the cost of making tax digital (MTD) to businesses will be a one off cost of £280 (average) in the first year and then ongoing annual savings for the following years.
One point in particular that may be cause for concerned was the deadline for end of year activity submission, which is now 10 months after the last day of period of account or 31st January, whichever is sooner. This could mean that where accounting periods are not aligned to the tax year, an individual could have a deadline for submitting their end of year activity prior to the end of the tax year to which that accounting period relates.