Tax bodies welcome Lords’ call for delay to MTD

Released 17 March 2017

The Association of Taxation Technicians (ATT), the Chartered Institute of Taxation (CIOT) and the Low Incomes Tax Reform Group (LITRG) have welcomed a critical report by the House of Lords Select Committee on Economic Affairs, Finance Bill Sub-Committee. The report, The Draft Finance Bill 2017: Making Tax Digital for Business, calls for a far more cautious approach by the government to the roll-out of Making Tax Digital (MTD) and a delay to the scheme from the planned 2018 to 2020.

The Lords’ report concludes that the roll-out of the scheme is being rushed, imposing unnecessary burdens on small businesses and landlords, and will yield little benefit to the government. The call for a delay to the scheme until 2020 to allow for a full pilot chimes with the tax bodies’ calls for the government to move at a more judicious pace on the compulsory requirements of MTD.

Yvette Nunn, co-chair of ATT’s Technical Steering Group, said that the report should give the government the impetus to allow more time for full end-to-end testing, piloting and evaluation to avoid unnecessary logistical and financial risks for both HMRC and businesses. The ATT supported the Lords’ concerns that the government's estimate of the 'tax gap' savings are fragile and not based on adequate evidence.

Adrian Rudd, chairman of the Joint CIOT and ATT Digitalisation and Agent Strategy Group, added that the Lords’ committee recognised the unprecedented technological and logistical challenges that would be faced by many small businesses that do not currently maintain digital records or interact with HMRC on a frequent basis.

Full details of the tax bodies’ comments can be found here.

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