HMRC’s Making Tax Digital plan dropped from latest Finance Bill (April 2017)

Latest Update - April 2017:

"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 at the 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.

In January, HMRC announced plans to introduce a Making Tax Digital “pilot” period, giving hundreds of thousands of Britain’s smallest company owners a year-long hiatus to implement the new scheme before their new duties became mandatory.

Several other measures that were considered controversial by some tax experts were also left of the Finance Bill by the government, including interest restrictions, loss relief carry forward, an end to the permanent status of “non-domiciles” for tax purposes, and deductions to the dividend allowance.

Roy-Chowdhury added: “ACCA will be continuing our discussions with the government on these issues once Parliament resumes”.

Source: BusinessAdvice Website