MAKING TAX DIGITAL DELAYED NOT DEAD

crowe-clark-whitehill-logoDespite the General Election having put the Government legislative plans on hold, Making Tax Digital hasn’t gone away, it’s more a case of simply delaying the inevitable, according to Crowe Clark Whitehill, the national audit, tax and advisory firm.

If the Making Tax Digital (MTD) plans had made it into legislation, millions of businesses and self-employed people would have been required to file multiple tax returns each year, rather than once a year online or by post.

MTD, which was scheduled to be imposed on unincorporated businesses and landlords with turnover above the VAT threshold in April 2018 and larger businesses from 2019, had come in for strong criticism from businesses and their representatives.

“Unless there is a change of Government in June, it remains a case of not if but when these new digital reporting requirements will come into force,” said Simon Warne, Tax partner at Crowe in Kent.

He added: “As every aspect of our world becomes digital, and with HMRC needing to speed up their rate of tax collection and reduce their number of clerks, businesses will be required to adopt more frequent digital tax returns.

“This delay will give HMRC time to reflect on the proposals, and importantly provide software companies with the time to develop and properly test digital solutions that work for business, and their advisors.”

After the General Election it is expected that the prospect of MTD will be debated with the business community and new proposals brought forward.

Simon Warne added: “With the vast majority of Kent’s 100,000 businesses being classified as SMEs, it is likely that when MTD resurfaces that it will be phased in over a few years with eligibility determined by turnover, as it is for VAT.

“However, all businesses need to think about how they can use digital solutions to improve their record keeping, and ensuring they are operating as tax efficiently as possible.”

Crowe’s offices in Maidstone and Tunbridge Wells can be contacted on 01622 767676 or 01892 700200 respectively.

 

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