Legislation to implement the government’s ‘Making Tax Digital’ initiative has been put on hold.
The government have decided to drop 72 out of 135 clauses from the 2017 finance bill, which includes MTD. Accountants have expressed positive feedback towards this decision as it allows them to properly debate and discuss this proposed legislation in more detail, before it is made law.
The introduction of MTD would have had the biggest effect on self-employed tax payers with turnovers above £85,000 – these individuals would have had to have filed at least five returns per tax year, as well as regular VAT returns.
Making Tax Digital was expected to come into force in April 2018, as a way to try and prevent errors in tax returns, and would have seen businesses and the self-employed submit tax returns online via computers and smartphones.
Many, however, raised concerns over this change – stating that it could actually cause more mistakes to be made on returns as it may have encouraged taxpayers to submit their returns online without the help of a professional.
It is hoped that this delay will allow more time to be spent researching the proposed initiative, and so potential issues like this can be thoroughly thought over before the final implementation.