Chancellor cuts elements from Finance Bill, but junior minister indicates it is still part of post-election plans
The Government has delayed the schedule for the Making Tax Digital (MTD) programme due to a sudden rush to get the Finance Bill through Parliament before the general election – but has indicated that it still intends to pursue the initiative.
MTD was dropped with several other elements of the bill, which has to be approved by Parliament before the dissolution. Chancellor Philip Hammond (pictured) has indicated that the Government is prepared to lose several elements to ensure the remainder are debated before 3 May.
The programme involves shifting businesses away from annual tax returns towards digital record keeping and quarterly updates. It has attracted criticisms from the accountancy business and Parliament’s Treasury Committee for having a timetable they describe as unrealistic, with smaller companies struggling to get the required software in place.
Last month the chancellor delayed elements of the plan for implementation in April 2019 instead of next year.
Following the announcement, Financial Secretary to the Treasury Jane Ellison told Parliament there has been no policy change and that Making Tax Digital is among the measures the Conservative Party plans to pursue in the next Parliament.
“The Government remain committed to the digital future of the tax system, a principle widely accepted on both sides of the House,” she said, adding that there is a need for Parliament to consider the measures properly.
Statements from oppositions MPs suggested that there is a general support for the intent of the plan. Labour MP Peter Dowd said that no-one is against the move to a digital tax system, but that his party does not agree with what he described as the rush to implement it.
Kirsty Blackman of the Scottish Nationalist Party said it was a sensible step and that “the changes are reasonable”.
The move won the support of professional body the Chartered Institute of Taxation. Its president, Bill Dodwell, said: “This is a sensible, pragmatic approach from the Government and Opposition. Agreeing to leave most of the complex and controversial clauses in the Finance Bill until a post-election Finance Bill where they can be scrutinised at greater length.
He added: “We particularly hope that the delay in legislating for Making Tax Digital will enable more of the framework for this huge project to be put in statute, rather than brought in through regulations, which are subject to less scrutiny and unamendable.”
Image from GOV.UK, Open Government Licence v3.0