Chancellor warned over implementation of HMRC’s digital tax reforms

ANDREW TYRIE, chairman of the Treasury Committee, has written to chancellor Philip Hammond to urge caution over the implementation of HMRC’s Making Tax Digital reforms.

Last month, HMRC outlined the details its digital tax strategy in a series of consultation documents. The much-trailed proposals have been broadly welcomed by business, but Tyrie has warned about the length of the consultation.

Given the length of the consultation papers and the complexity of the issues, many responses will not be submitted much before the closing date of 7 November, Tyrie warned the chancellor.

HMRC has already said its digital tax plans will be delayed until 2019 so that large businesses have enough time to adjust. But further postponements may be required, Tyrie said.

“Implemented carefully, [Making Tax Digital] could do some good. But it could also do much harm. The consultation is therefore crucial. It needs to be meaningful. There may be a case for delaying the implementation of MTD. A year’s extension for an unspecified group of businesses may not be enough,” he said in his letter to the chancellor.

“HMRC’s proposals are major changes. There remains considerable cause for concern with the proposals. Better to get it right than to stick to a rigid timetable.”