The Government has scrapped plans to implement Making Tax Digital (MTD), ahead of the debate on the bill in the House of Commons.
When Theresa May first announced the surprise general election on 8th June, the Chartered Institute of Taxation (CIOT) wrote a letter to Chancellor of the Exchequer, Philip Hammond. In the letter, the CIOT urge the Government to reduce the bill to its core elements, thus allowing complex measures to be debated after the election has taken place.
The removal of MTD from the 2017 finance bill has been welcomed by many, including the likes of ACCA and ICAEW, the consensus being that this was a sensible decision made by the Government.
At this stage, it is unclear whether or not the Government’s deferral is a temporary, or a more permanent measure. We suspect though, that MTD has simply been put on hold for the moment. We expect MTD will still come into effect fairly soon and that this will be announced later this year and then implemented 2019/20.
Of course, this is just speculation, but it seems unlikely that the Government would move away from digitising taxation completely. In an age where everything is becoming increasingly digitalised, it is highly improbable that taxation will be an exception.
We still strongly recommend all clients begin making the move to cloud accounting, not just because we believe it will inevitably become a legal requirement, but also because of the many advantages it has over traditional accounting methods. This will mean that when the change does come, you will be ready.
As always, we are more than happy to discuss MTD with you and help you to prepare, simply get in touch.