Making Tax Digital on hold – but businesses should still prepare

Tax Comments Off on Making Tax Digital on hold – but businesses should still prepare

Plans to force every business and landlord operating in the UK to file four six returns a year online plus VAT returns have been put on hold ahead of the General Election on June 8.

And the news has been welcomed by leading Merseyside accountant Peter Taaffe, managing partner of Castle Street-based practice BWMacfarlane.

However, Mr Taaffe said this was likely to be just a pause and businesses large and small should still prepare for change.

The Government’s Making Tax Digital (MTD) initiative was due to be rolled out next April, with pilot schemes already under way.

The proposed scheme is forcing a  significant behavioural shift for business owners and self-employed people, who would need to file tax returns six times a year as opposed to just once a year at present.

In his Budget in March, Chancellor Philip Hammond has already conceded a 12 month delay  for small firms and landlords under the VAT threshold of £85,000 for a year until April 2019.

MTD was part of the Finance Bill and was due to be debated in the House of Commons this week but has now been dropped from the Bill.

However, the move still seems inevitable and the Treasury has indicated that MTD will be back on the table after the election, should the Conservatives form the next Government.

BWMacfarlane is making a name for itself as a pioneer of digital accounting and is already working to prepare their clients for the shift and have developed strong relationships with leading software providers, including Quickbooks Online of whom they are Platinum Partners.

Mr Taaffe said: “We have been concerned for some time that the Government was pushing ahead too hard and too fast with MTD as many businesses are simply not prepared.

“This pause ahead of the election will hopefully provide an opportunity for further debate on the issue and perhaps the Treasury can even be persuaded to push back its timetable.

“However, the chances of this being scrapped altogether are remote. Sooner or later every business and self-employed person in the UK is going to have to face up to this challenge but also embrace the opportunity offered by cloud accounting as a matter of routine.

“We would urge all businesses to make sure they are ready when it arrives. The time to start preparing is right now.”

For further information on Making Tax Digital you can download our guide here and for more information and a free Cloud Accounting software demonstration please contact Vicki Harper