The highly anticipated Treasury Select Committee report on HMRC’s Making Tax Digital (MTD) initiative has been published. For many the conclusion of this report was fairly close to what had been anticipated.
The intention of the MTD project is to make the UK the most digitally advanced global tax administrator. This is a great goal but there are concerns that the relatively short timetable for implementation is too ambitious and likely to prevent success.
One of the primary aims of the MTD initiative is to provide support for businesses by the simplification of the tax submission process. Whilst this is broadly welcomed, some of the changes suggested under the MTD system appear to contradict the intention.
The main example of this is, as we have discussed before in some detail, the decision to make returns quarterly rather than annually under the online submissions system. For many the costs associated with this – more time on submissions means less time on actual business – outweigh the benefits, no matter how significant they are.
At this stage – prior to official review or comment in respect of the Treasury Select Committee report – all businesses are expected to have digital record keeping in place by April 2019. Income tax and NI reporting is also expected to be digital by this date.
Many believe that this timetable will inevitably be reviewed in the light of the report. It is widely hoped that an initial voluntary uptake of MTD is introduced prior to making it compulsory.
Our clients know that we, as a leading accountant in London, are closely monitoring all developments related to MTD. Whilst we believe that ultimately a move to digital services in all aspects of business will be as inevitable as it will be beneficial, we would agree that the concerns raised thus far must be given fair consideration.
It is highly likely that considerably more discussion and focus will concern MTD during 2017. We look forward to bringing you updates on the details relevant to your business.