Making Tax Digital – What on earth is going on?
Making Tax Digital (MTD)was a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs –supposedly meaning the end of the annual tax return for millions.
However, many now believe that the initiative has been fatally wounded by the outcome of the recent general election. The Finance Bill, which consisted of 762 pages, was slimmed down to around 140 pages, and all of the MTD clauses without exception disappeared.
So, where does MTD go from here?
There is now a very real chance that, whilst MTD is likely to proceed, it will be at a slower pace and not necessarily in the way previously set out. The original timetable was for businesses, self-employed people and landlords to start using the new digital service from these dates:
- April 2018, if they have profits chargeable to Income Tax and pay Class 4 National Insurance contributions (NICs) and their turnovers are in excess of the VAT threshold
- April 2019, if they have profits chargeable to Income Tax and pay Class 4 NICs and their turnovers are below the VAT threshold
- April 2019, if they are registered for and pay VAT
- from April 2020, if they pay Corporation Tax (CT)
We await clarification on what is happening next.