Posted on 3 August 2017
It was no surprise to many when Mel Stride MP, Financial Secretary to the Treasury, recently announced further substantial delays to the implementation of the much talked about Making Tax Digital (MTD) initiatives.
Since the MTD proposals were first announced I have been suggesting that the initiatives were being pushed on too quickly and without sufficient consultation with interested parties. There has been consultation but, up until now, HMRC have not been listening. Now, however, the dissenting voices have been heard and the new rules will not come into force, other than for VAT, until 2020 at the earliest.
VAT to be filed digitally from April 2019
The only exception to the delay is for VAT registered businesses.
MTD will be obligatory from April 2019 for VAT returns. This is perhaps a sensible move given the existing requirements for quarterly submission of VAT returns online.
Businesses can, if they wish, voluntarily adopt the MTD procedures from April 2019 for other taxes. However, I suspect that there will be very few early adopters because it could well be beyond 2020 when MTD becomes mandatory – the announcement was ‘2020 at the earliest’.
With the delay, and the staged approach with VAT, HMRC should now have plenty of time to test their systems to ensure that they work and are robust before a full roll out of MTD is sanctioned.
I believe that the announcement is very good news and does show that ministers have listened to representations and announced what many thought was an inevitable conclusion to what is potentially a very significant change to the UK tax system.
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