HM Revenue and Customs’ Making Tax Digital programme is “progressing well”, financial secretary to the Treasury Mel Stride has claimed.

Responding to a written parliamentary question, the Treasury minister said that 500,000 firms – all of which will be required to use MTD from next year – had been invited to join a pilot from October onwards. 

Using MTD will be required to file all business VAT returns covering a period beginning on 1 April 2019 or later, Stride said. For firms that file quarterly returns, this will mean that, in effect, using the new digital platform will be mandatory from 7 August onwards.

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“HMRC is continuing to send letters to all businesses in scope, raising their awareness and inviting them to join early so that they can test the service before mandation,” he added.

The government has also made significant strides in terms of the range of software options businesses can use to keep records file their VAT returns. In July, 18 publishers were unveiled as the first tranche of firms to achieve compatibility with HMRC’s VAT systems. There are now 60 companies on the list, with over 100 more in the process of developing a compatible product. 

Stride said: “A variety of products at different price points are available – including some that are free – and some can be used with a spreadsheet for those who prefer not to make the move to a fuller software product."

His comments come just a few weeks after a report from a parliamentary select committee urged HMRC to delay the rollout of Making Tax Digital for VAT by a year. The committee criticised the department for having "neglected its responsibility to support small businesses”.