Following concerns about the ambitious timetable for implementing MTD (Making Tax Digital), HMRC have delayed its introduction until 2019 to allow businesses more time to prepare and adjust.
Jane Ellison, who took over from David Gauke as finance secretary to the Treasury, made the announcement at HMRC’s annual conference, saying, “You told us that even slightly large businesses might need more time to prepare for the new system, so we have proposed deferring the introduction of any changes to 2019 for those businesses too.”
The Conservative MP for Battersea accepted that MTD heralded a major shakeup in the operation of tax administration but defended the plans on the basis that having an online account, accessible at any time, would make life a lot easier for millions of taxpayers.
Ellison explained that HMRC wanted to provide individuals and businesses with the type of digital service that people associate and expect with the 21st century, commenting, “it’s just not right that our tax service should lag behind – stuck in an age of paperwork, letters and phone calls.”
The controversial quarterly updating of business records online was not broached by Ellison but she was at pains to point out that there had been some modifications to MTD following feedback, such as the exemption for landlords and unincorporated businesses, e.g sole traders and partnerships, that earn less than £10K p.a.
There are currently six open consultations each focusing on specific taxpayer groups or specific elements of the MTD reforms, which are due to close on 7th November 2016, and it maybe that further concessions will have to be given following a large response that will, no doubt, continue to voice specific concerns.