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Where Taxpayers and Advisers Meet
Government Puts Brakes on Making Tax Digital – About Time! The government has today published an update on Finance Bill 2017, which confirms that all policies that were cut from the March 2017 Budget in order to make it through Parliament before the Gener
N/A, by Lee Sharpe, Tax News - Budgets and Autumn Statements
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The government has today published an update on Finance Bill 2017, which confirms that all policies that were cut from the March 2017 Budget in order to make it through Parliament before the General Election, will now be re-instated and take effect from April 2017 as originally planned:

“The Government confirms that intention. It expects to introduce a Finance Bill as soon as possible after the summer recess containing the withdrawn provisions. Where policies have been announced as applying from the start of the 2017-18 tax year or other point before the introduction of the forthcoming Finance Bill, there is no change of policy and these dates of application will be retained. Those affected by the provisions should continue to assume that they will apply as originally announced. The Government confirms that intention. It expects to introduce a Finance Bill as soon as possible after the summer recess containing the withdrawn provisions. Where policies have been announced as applying from the start of the 2017-18 tax year or other point before the introduction of the forthcoming Finance Bill, there is no change of policy and these dates of application will be retained. Those affected by the provisions should continue to assume that they will apply as originally announced. The Government confirms that intention. It expects to introduce a Finance Bill as soon as possible after the summer recess containing the withdrawn provisions. Where policies have been announced as applying from the start of the 2017-18 tax year or other point before the introduction of the forthcoming Finance Bill, there is no change of policy and these dates of application will be retained. Those affected by the provisions should continue to assume that they will apply as originally announced. The Government confirms that intention. It expects to introduce a Finance Bill as soon as possible after the summer recess containing the withdrawn provisions. Where policies have been announced as applying from the start of the 2017-18 tax year or other point before the introduction of the forthcoming Finance Bill, there is no change of policy and these dates of application will be retained. Those affected by the provisions should continue to assume that they will apply as originally announced.The Government confirms that... ...it expects to introduce a Finance Bill as soon as possible after the summer recess containing the withdrawn provisions. Where policies have been announced as applying from the start of the 2017-18 tax year or other point before the introduction of the forthcoming Finance Bill, there is no change of policy and these dates of application will be retained. Those affected by the provisions should continue to assume that they will apply as originally announced.”

However, with regard to Making Tax Digital as a .Gov announcement:

“Only businesses with a turnover above the VAT threshold (currently over £85,000) will have to keep digital records and only for VAT purposes – and only from April 2019

Businesses will not be asked to keep digital records or to update HMRC quarterly, for other taxes until 2020.

This means that businesses and landlords with a turnover below the VAT threshold will be able to choose when to move to the new digital system.

All businesses and landlords will have at least two years to adapt to the changes before being asked to keep digital records for other taxes.”

Note that the .Gov announcement suggests that all businesses will be going digital but have a choice as to when, whereas the original Ministerial Statements says, “Businesses with turnover below the VAT threshold will not be required to use the system but can choose to do so. Businesses with turnover below the VAT threshold will not be required to use the system but can choose to do so.”  It then goes on to say:

“The Government will not widen the scope of MTD beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. This will ensure that there is time to test the system fully and for digital record keeping to become more widespreadThe Government will not widen the scope of MTD beyond VAT before the system has been shown to work well, and not before April 2020 at the earliest. This will ensure that there is time to test the system fully and for digital record keeping to become more widespread.”

It seems likely that the government has every intention of making MTD mandatory for everyone, but has had to accept that HMRC’s timetable and projections were hopelessly optimistic, particularly against the backdrop of the car-crash that is fast becoming the logistical reality of Brexit. Having said that, if the government really intends to wait until MTD is proven to work, then

a)       It will probably have to wait longer than 2020 to convince businesses

b)      It may not actually have to make it mandatory if businesses can be convinced of the benefits of “going digital”

About The Author

Lee is TaxationWeb's Articles & News Editor and writes for TaxationWeb. He is a Chartered Tax Adviser with experience of advising individuals and owner-managed businesses over a broad spectrum of tax matters.
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