Call us on 01792 466 428
Book a FREE Consulation

Making Tax Digital –  Gone But Not Forgotten

The much-scrutinised Making Tax Digital (MTD) programme has been dropped from the Government’s Finance Bill 2017 in the run-up to the General Election, in a move that is likely to please some small business owners. However, nobody doubts that MTD will return in the next Parliament.

In some ways this action is simply a political technicality being played out. These are the last few days of Parliament before dissolution, prior to the imminent General Election, so Public Bills must be passed or scrapped – they cannot simply be passed through into the next Parliament.

During this period both sides of the house agree over which clauses of the Finance Bill to pass and which to drop. So, for now, MTD is gone. This seems a sensible temporary action that will buy businesses – and their accountant and financial advisors – extra preparation time.

MTD is intended to make HMRC one of the most digitally advanced tax administrations anywhere in the world, but disquiet has been voiced by finance experts of all political persuasions, and by business operators.

While many of the initial fears over the nuts and bolts of MTD have been settled, concerns over the speed of implementation – originally set for April 2018 – were still an issue for many.

And since MTD will have such a big impact upon the way all businesses operate it seems sensible for the Government to revisit it at a later date.

The Chartered Institute of Taxation (CIOT) wrote to chancellor Philip Hammond very recently urging that the Government does just that. They suggested that, rather than rush substantial tax changes through Parliament before the election, measures dropped in the bill could be reintroduced post-election, once the appropriate framework was put in place.

It seems likely that will be the approach taken. After all, while business owners might not welcome wholesale changes to their systems, MTD, if implemented sensibly and with enough lead-in time, is set to modernise and streamline the way we keep our tax records and report them to the tax man and, dare I say it, lessen some of the potential pain of doing so.

MTD is very likely to be the future of tax reporting in Britain and any preparations business are making now to prepare for it aren’t wasted.

If you haven’t taken specialist advice yet on what you will need to do to get ready for the era of digital tax reporting, I would urge you to do so.