Calls to delay Making Tax Digital
The British Chambers of Commerce (BCC) has called for Making Tax Digital (MTD) to be delayed after finding almost a quarter of UK businesses (24%) have not heard of the programme
Less than a year out from its introduction, only one in 10 businesses surveyed said they knew “a lot of details” on the switch to a digitised system, according to research from the BCC and Avalara.
The majority (66%) of business surveyed said they only know “some details” or only knew the Revenue’s flagship programme by name, while 25% of those that know about it have made no preparations.
MTD was one of 39 projects on a list given to MPs at the beginning of this month that HMRC may have to put on hold to focus on Brexit, which could cost the Revenue “billions”.
“The government’s aim to modernise the UK’s tax system is admirable, but in view of low business awareness and the impending challenges of Brexit, it would make sense for HMRC to delay the implementation of MTD in order to get this change right,” said Mike Spicer, director of economics and research at BCC.
He said that ministers must “face up to the reality” of what HMRC is up against and delay implementation to allow it to support businesses through the immediate issue of Brexit.
“The government has been consulting and engaging with businesses, agents and representative bodies since MTD was first announced in 2015 to ensure it is a success, raising awareness and ensuring stakeholder views inform the design of the service,” a HMRC spokesperson said.
The Revenue says it will continue to work with small businesses, stakeholders and the accountancy profession to ensure everyone knows what is required.
Under the new programme, VAT-registered businesses are expected to meet their VAT obligations if turnover is above the VAT threshold by April 2019.
Based on the success of the programme, the scope for MTD could be widened, but not before April 2020 at the earliest.
It is a significant change in the way HMRC is to address the part of the tax gap caused by taxpayer error, which currently stands at £9.2bn for 2016 to 2017.
The research also suggested that businesses are dissatisfied with support from HMRC.
When asked to rate the overall service, 60% gave the Revenue a three out of five, and only 6% of those who claim to know about MTD have contacted HMRC for advice – compared to 51% who contacted an accountant.
A report from the Public Accounts Committee in January said HMRC may have “bitten of more than it could chew” in regards to the transformation project (of which MTD is a part).
Following stakeholder feedback the government made significant changes to the timetable and scope of MTD in July.
Comments
'3' comments
Ian Walsh
13 July 2018 17:13:44Don't you just want to weep? As a practice, we have been talking to our clients about MTD for what seems like an eternity. We've been helping and encouraging them to get their bookkeeping systems ready for April 2019. Those clients already using an electronic accounting package will experience some change, but for those who have manual systems, and yes there are still some out there, the upheaval will be greater. If, at this late stage, a delay in the implementation of MTD VAT is allowed, it puts a huge dent in our credibility, because we've been saying "It's going to happen in April 2019 and you must be ready". We're going to be seen as the little boy who cried wolf! All because some people can't get their act together.
ROBIN SUMMERS
13 July 2018 16:41:00THE TREASURY and HMRC have ignored the Parliamentary Committtee chaired by Andrew Tyrie-MTD should not be compulsory and if it is so good every body would have rushed to do it. HMRC are unable to even to programme their systems to the complexity of the present tax legislation. there is a whole generation of Taxpayers who are not computer literate. as to the so called 'Tax Gap' these are the same forecasters who assumed the LDF would bring in £7billion and collected £700 million./ perhaps HMRC might use their resources checking benefit fraud, where they continue to overpaybillions each year.
Noel Guilford
27 June 2018 12:30:21This is frankly ridiculous. Accountants have known about this for over 2 years and should have discussed it with their clients before now, particularly those who will need to move their software to the cloud. Asking for a further delay is a waste of everyone’s time. Let’s just get on with it.
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