Lords call for delay to MTD
Making Tax Digital for Business (MTD) is a subject of concern for a number of organisations, from tax experts through to the House of Lords Select Committee on Economic Affairs. All agree that MTD is being rushed and its implementation should be delayed until 2020.
A Lords Sub-Committee published a report in March 2017 about MTD for Business in which they concluded that implementing the scheme within the time-frame proposed by HMRC will impose unnecessary burdens on small businesses and landlords. The report, The Draft Finance Bill 2017: Making Tax Digital for Business made a number of claims.
It disputed HMRC’s assertion that the cost to a small business of MTD would average £280. The report stated that HMRC had not taken into account the level of disruption which many small businesses would face as they switched from their current accounting systems to keeping digital records.
The Lords proposed that MTD for Business should be delayed until 2020 to allow for a full pilot and evaluation system so that any glitches in software were ironed out well in advance. Keeping to the proposed timetable could add to the overall costs of MTD and outweigh any of the anticipated benefits.
Tax professionals welcomed the Report, agreeing that £280 was an unrealistic figure and that the timeframe proposed by HMRC had not taken into account the level of support that small businesses would need to implement the changes.