Landlords are welcoming confirmation that the Government’s digital tax change plans have been overturned.
Only landlords with a turnover above £85,000 (the current VAT threshold) will be expected to keep digital tax records.
The Treasury’s announcement reflects the calls that were made by the Residential Landlords Association (RLA) in its submission on the consultation introducing the initiative, and mirrors concerns expressed in oral evidence the RLA provided to a House of Lords committee.
Under a new timetable to implement the digital tax change, only landlords and businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records and only for VAT purposes. They will need to do so from 2019. Ministers had previously said that they would apply this rule to those with a turnover above £10,000.
Businesses and landlords will also not be asked to keep digital tax records or update HM Revenue & Customs (HMRC) quarterly for other taxes until at least 2020.
The Policy Manager of the RLA, John Stewart, comments on the digital tax change news: “The RLA has long called for an increase in the threshold at which digital tax records will be required and for more time to enable landlords to properly implement this radical change.
“Whilst we support efforts to improve the efficiency of the system, faced with unhelpful changes to the way they will be taxed, the last thing landlords needed was an imminent change to the way they keep their records.”
He believes: “The Treasury has made the right decision in giving landlords more time to prepare for the policy, where it applies to them, and we welcome the Government listening and responding so positively to our concerns.”
Landlords, are you glad that the Government has made a U-turn on its digital tax change plans? And are you one of the ones that will be affected, regardless of the recent news?