Making Tax Digital removed from Finance Bill 2017
28th April 2017
Quickly following the announcement of the general election in June 2017, the government have now removed the legislation implementing Making Tax Digital (MTD) from the Finance Bill 2017.
We are now left wondering what this means for the future of MTD. We, like many other firms of accountants, have spent considerable time assessing the legislation and potential impact from the introduction of MTD.
Initially, we were told MTD would be introduced from April 2018 for unincorporated businesses with turnover exceeding £10,000, which seemed a ridiculous threshold to apply and far too soon to give all these businesses time to prepare. Following the consultations, HMRC begrudgingly increased the threshold to £85,000, but have stood by the April 2018 deadline for the introduction of MTD for these businesses.
Now the legislation has been removed altogether and we cannot be certain (although many think it likely), that MTD will be introduced again after the election. Even if it is introduced again, will the legislation be the same as previously proposed or something materially different?
In my view, if the government are not able to give businesses at least 12 months to prepare for the introduction MTD, then implementation should be deferred. If you take a long term view, does it really matter if businesses are given a further year to deal with this, rather than rushing it through and creating more problems for everyone.
Author: Luke Thomas, Director
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