The financial secretary to the Treasury, Mel Stride, made a statement to the House of Commons on 19 February setting out HMRC’s progress on delivery of making tax digital (MTD) and confirming there would be no further delays in implementation.
According to HMRC’s latest research, 81% of the mandated population were aware of MTD as of December 2018 and 83% of those had started to make the necessary preparations.
The minister attempted to give reassurances regarding the proximity of the April 2019 ‘MTD for VAT’ start date to the date on which the UK will leave the EU. He told the House: ‘MTD is designed to enable businesses to meet their UK tax obligations as simply as possible, regardless of the outcome of EU exit discussions, and is designed to complement other business tax obligations. We will continue to work closely with the software industry and with business over the coming weeks to ensure that that happens’.
Stride also defended HMRC’s decision not to produce its own software for businesses, saying he made ‘no apology for overseeing the development of a diverse software-supplier marketplace that caters to a variety of needs’.
The CIOT welcomed the progress being made on awareness of MTD, although the chair of the joint CIOT/ATT digitalisation and agent strategy working group, Adrian Rudd, qualified this with the comment that more work is needed, as ‘one in five affected businesses remain completely unaware of it and many of those that are aware are hazy on the details’.
‘We would have liked the minister to have announced a one-year deferral of mandation in order to allow businesses more time to prepare, especially during these challenging times’, Rudd added.
‘Whilst HMRC’s recently commissioned survey results indicate that half of VAT mandated businesses said they planned to sign up to MTD before the April 2019 deadline, signing up before fully ready will cause significant problems and needs to be timed correctly’, Rudd said, referring to recent guidance issued by the CIOT on timing.
The financial secretary’s statement noted that ‘the first stagger of businesses that file quarterly will not need to submit their first VAT return through the new service until August this year’.
While the minister confirmed there would be a ‘process to claim an exemption from MTD on the basis of digital exclusion owing to factors such as disability or problems with access to broadband, or on religious grounds’, Rudd pointed out that ‘we are still waiting for HMRC to publish the detailed guidance to explain when someone might be able to claim exemption from the new rules and how they should do this’.
Meanwhile, new research from KPMG has found a majority of businesses saying they need more support ahead of the 1 April start date. The survey asked 1000 businesses which statement best described their attitude to MTD and the 2019 deadline. The responses showed:
64% saying it is a good idea but that they need more support;
The financial secretary to the Treasury, Mel Stride, made a statement to the House of Commons on 19 February setting out HMRC’s progress on delivery of making tax digital (MTD) and confirming there would be no further delays in implementation.
According to HMRC’s latest research, 81% of the mandated population were aware of MTD as of December 2018 and 83% of those had started to make the necessary preparations.
The minister attempted to give reassurances regarding the proximity of the April 2019 ‘MTD for VAT’ start date to the date on which the UK will leave the EU. He told the House: ‘MTD is designed to enable businesses to meet their UK tax obligations as simply as possible, regardless of the outcome of EU exit discussions, and is designed to complement other business tax obligations. We will continue to work closely with the software industry and with business over the coming weeks to ensure that that happens’.
Stride also defended HMRC’s decision not to produce its own software for businesses, saying he made ‘no apology for overseeing the development of a diverse software-supplier marketplace that caters to a variety of needs’.
The CIOT welcomed the progress being made on awareness of MTD, although the chair of the joint CIOT/ATT digitalisation and agent strategy working group, Adrian Rudd, qualified this with the comment that more work is needed, as ‘one in five affected businesses remain completely unaware of it and many of those that are aware are hazy on the details’.
‘We would have liked the minister to have announced a one-year deferral of mandation in order to allow businesses more time to prepare, especially during these challenging times’, Rudd added.
‘Whilst HMRC’s recently commissioned survey results indicate that half of VAT mandated businesses said they planned to sign up to MTD before the April 2019 deadline, signing up before fully ready will cause significant problems and needs to be timed correctly’, Rudd said, referring to recent guidance issued by the CIOT on timing.
The financial secretary’s statement noted that ‘the first stagger of businesses that file quarterly will not need to submit their first VAT return through the new service until August this year’.
While the minister confirmed there would be a ‘process to claim an exemption from MTD on the basis of digital exclusion owing to factors such as disability or problems with access to broadband, or on religious grounds’, Rudd pointed out that ‘we are still waiting for HMRC to publish the detailed guidance to explain when someone might be able to claim exemption from the new rules and how they should do this’.
Meanwhile, new research from KPMG has found a majority of businesses saying they need more support ahead of the 1 April start date. The survey asked 1000 businesses which statement best described their attitude to MTD and the 2019 deadline. The responses showed:
64% saying it is a good idea but that they need more support;
