Tax & admin Fred Heritage · 25 April 2017
HMRC’s Making Tax Digital plan dropped from latest Finance Bill
The government has halted plans to rollout the Making Tax Digital initiative until after this year’s general election, it has been announced. Legislation for Making Tax Digital the government’s plan to digitise the tax system and implement compulsory quarterly tax reporting for millions of small UK businesses and self-employed has been struck out of the latest Finance Bill. Debated in in the House of Commons on 25 April, the Finance Bill will be the last to be enshrined in law before parliament adjourns for the general election before 8 June. Consequently, it is likely that Making Tax Digital will be delayed by at least one year, meaning that it could now take until 2020 for the initiative to have an impact on millions of small business owners. Tax experts have welcomed the move, claiming that the government is sensible not to rush the process of legislating Making Tax Digital. Head of tax at accounting body the Association of Chartered Certified Accountants (ACCA), Chas Roy-Chowdhury, said: ACCA has raised some serious concerns about the implementation plan for [Making Tax Digital]. we advised at last week’s Treasury select committee hearing that it be delayed until after the general election to ensure that there is time for full and comprehensive debate. Anita Monteith, tax manager atthe Institute of Chartered Accountants in England and Wales (ICAEW), added: Making Tax Digital plans remain controversial and need more scrutiny by those who will be affected, and most importantly proper parliamentary debate a clear roadmap as to how MTD will work in practice is needed.” Originally due rollout in April 2018, chancellor Philip Hammond, in this year’s Spring Budget speech, confirmed that a year’s delay of Making Tax Digital would be introduced for firms with a turnover of less than the VAT threshold, exempting 3.1m small businesses from the scheme until 2019.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.