ANDREW TYRIE has suggested there will not be enough time to implement Making Tax Digital (MTD) by April 2018.
In correspondence between Andrew Tyrie, chairman of the Treasury committee and Jane Ellison, financial secretary to the treasury, the government’s response for MTD consultations were discussed, with Tyrie outlining a lack of time to implement the controversial tax reporting regime by the planned date.
Mr Tyrie said of the correspondence: “It is welcome that the government has decided not to rush its response to HMRC’s consultation. But this may mean that there is insufficient time for adequate consultation to take place on the draft clauses, once published.”
Page 41 of the Autumn Statement document states: “In January 2017, the government will publish its response to the Making Tax Digital consultations and provisions to implement the previously announced changes.”
The letters formed part of a discussion between the parties over Tyrie’s concerns about MTD, following evidence sessions held by the Treasury Select Committee. Ellison commented in her letter to Tyrie: “HMRC and HM Treasury officials continue to review and consider all the responses received. I can assure you that final policy decisions will take account of all these responses and out ongoing discussions with businesses and professional bodies.”
Three months’ ‘scrutiny’
The chancellor has told HMRC to bring forward legislation for the 2017 Finance Bill (in order to implement it in April 2018). Under the normal tax policy-making process, draft clauses for the 2017 Finance Bill are due to be published on 5 December 2016. In most cases the draft clauses for Finance Bills would be published for three months of scrutiny before it is introduced to Parliament.
Tyrie said (to Ellison): “The Finance Bill 2017 will be introduced to Parliament later than is normal; or that Making Tax Digital will be legislated in Finance Bill 2018 (which would leave very little time, if implementation is still planned for April 2018).”
On 15 September, Mr Tyrie had wrote to Mr Hammond to urge caution over the implementation of the MTD reforms.
Tyrie stated: “Much depends on the consultation responses. They may require a delay. Getting this right matters a lot, particularly to the small businesses who could be hit hard by a mistake. […] the evidence we heard suggests that the introduction of MTD should not be rushed. Every effort should be made fully to pilot its introduction, perhaps over several years.”
The ATT had previously expressed concern that the legislation was overly complex and created unnecessary complications within the practical working of the new allowances
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Signed into law by president Barack Obama in 2010, the Dodd-Frank legislation has tightened regulation of the US financial system
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