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.