Pre-election Finance Bill adds to MTD uncertainty
The snap general election has resulted in a bump in the road for Making Tax Digital (MTD). MTD, along with a number of other tax measures, has been dropped from the government’s Finance Bill 2017, although it could reappear in the Autumn Finance Bill.
The clause to introduce digital reporting for Income Tax has not been included in the final Finance Bill. Under current proposals, unincorporated businesses above the VAT threshold were due to start reporting their business’s financial data digitally to HMRC in April 2018. It’s not yet clear whether this date has been, or will be, pushed back following MTD’s removal from the Finance Bill.
With the UK’s small businesses, freelancers and their accountants eagerly awaiting more information about MTD in draft legislation which was planned for later this year, it’s now likely that they will have to wait a little bit longer.
Will Making Tax Digital be scrapped?
The next Finance Bill is scheduled for the Autumn so this could well be no more than a short delay in setting the proposed MTD timeline in stone - though this will of course depend on which party wins the general election. Just 63 out of 135 clauses in the Bill survived the amendments, with MTD among the 72 clauses scrapped. The amendments are likely due to the government’s preparations for the general election.
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