Many leading experts, including the ATT, CIOT and IPSE have supported recommendations from the House of Lords to further delay the introduction of mandatory Making Tax Digital for VAT.
The call was one of the key recommendations of the House of Lords Economic Affairs Committee’s report, ‘Making Tax Digital for VAT: Treating Small Businesses Fairly’.
It’s been suggested by the report that government should wait until at least April 2022 before Making Tax Digital is extended to other taxes in order for lessons to be learnt from the implementation of MTD for VAT.
Adrian Rudd, Chair of the CIOT / ATT Digitalisation and Agent Strategy Working Group (DASWG), said,“Many businesses still have little or no awareness of HMRC’s Making Tax Digital project. This widespread lack of awareness is a concern with the start date for MTD for VAT less than 150 days away. MTD for VAT will be the biggest overhaul in VAT obligations in decades. With just a few months to go before it kicks in, these knowledge gaps could mean normally compliant firms fail to fulfil their new obligations.
“If properly implemented, digitisation could lead to efficiencies for taxpayers, agents and tax authorities. But many businesses will really struggle to get ready in time, and we support the Committee’s recommendation of a delay for MTD for VAT. Pushing back the start date for Making Tax Digital for other taxes to 2022 at the earliest, is something we support, but it is more important that there is sufficient time set aside for a full review and evaluation of MTD for VAT before this programme is extended.