A few weeks ago we found out that the government’s Making Tax Digital (MTD) initiative has been ditched from the 2017 Finance Bill. A bit surprising, we must say.
The ambitions of MTD are worthy of admiration: make tax administration more effective by bringing an end to bureaucratic form-filling, eliminating time delays, whilst also reducing its overheads for managing tax affairs. Who’d say no to that?
Remember how online banking made monthly statements irrelevant? Well MTD is an equivalent shift in the industry, but it won’t be a dashboard for your money, it will be a portal to view all your tax affairs, in the same place, in real-time. Yes, both individuals and businesses alike!
However, just when we were getting ready to tackle the bull by its horns (HMRC had planned to transition most tax paying individuals and businesses online by April 2018), the government dropped the MTD proposals from the 2017 Finance Bill!
(A bombshell really. If it’s still going to happen, I think we should be getting on with it.)
But is MTD dead as many pundits suggest?
Well, it certainly isn’t. We are confident that it will resurrect post the snap election on 8 June 2017. Most likely in the Autumn Finance bill.
We think MTD is, for now, the victim of UK politics. As soon as Theresa May announced a snap election, it was really obvious that there will be a squeeze on parliamentary time. As a result, vast swathes of the Finance Bill 2017 (FB17) were deprioritised. In fact, only 63 out of 135 clauses in the Bill have survived the amendments, with MTD among the 72 clauses scrapped.
Basically, the removal of MTD from the Bill can be compared to a weight-loss programme as the government gets busy preparing for the upcoming General Election.
But there is no reason to think that MTD is cancelled or over, at least for the time being:
According to Emma Smith of the Accountancy Age, there are three possibilities, depending on the results of the election:
The digital age is here. MTD is knocking at our doors. Maybe the April 18 start dates are contentious, but we have to, as Jeremy Irons in his chilly singing voice as Scar in the Lion King would have said, “BE PREPARED”. We have to immerse ourselves in it – so our recommendation is – don’t stop your preparation.
If we can begin to consider the ways in which digital tax will affect pricing structures, how the service will be delivered, how clients and staff will be prepared and trained, what software training you will need, maybe we will be in a better position when MTD walks through the door.
My name is Vishal Kurani, the author of the QXAS blog and I appreciate you stopping by! I help accountants gain Accounts Outsourcing knowledge through my easy to follow blogs and guides. Download my free guide "The Accountants Guide to Making Payroll Profitable" to learn how to make payroll profitable for your accountancy practice.