Government under mounting pressure to review Making Tax Digital timescale

The Government has again been urged to reconsider its timescale for Making Tax Digital (MTD), after a 50-page report from MPs in the Treasury Committee suggested that the project should be delayed by one-to-two years.

Under proposals outlined in consultations which were first opened in August 2016, MTD is due to be phased in from April 2018 – but the Treasury Committee has said that the project should not be rolled out until “at least 2019/20, or possibly later,” according to reports.

The Committee adds that MTD’s proposed exemption threshold for quarterly digital reporting to HM Revenue & Customs (HMRC) – which is currently just £10,000 – should be raised to match the VAT threshold of £83,000.

Their report, published late last week, says: “The Committee has yet to see evidence strong enough to justify a threshold below the VAT threshold.

“It may exist, but the Government needs to assemble and publish it”.

Andrew Tyrie, Committee chairman and Conservative MP, warned: “If the Government gets [MTD] wrong, the culture of mutual trust and goodwill between HMRC and the vast majority of taxpayers – which still exists in the UK and which helps to keep the tax gap down – could be jeopardised”.

Under existing proposals, HMRC will roll out MTD and quarterly digital reporting for landlords and the self-employed in April 2018, followed by small and medium-sized enterprises (SMEs) and larger firms shortly thereafter.

The Revenue has previously said that all tax systems will be 100 per cent digital by 2020.

A long-awaited Government response to six MTD consultations is expected by the end of this month.

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Craig Nicholson
Craig joined Wilson Wright in February 2012 as our tax partner, heading up the twenty strong personal tax department. He will further enhance the taxation services that we provide with his in depth experience of personal, corporate and international tax matters.