The government today (13 July) announced that the Finance Bill will be introduced to Parliament until after the summer recess and contains amendments to original proposals on MTD. Non-VAT reporting will remain voluntary until 2020.
Chas Roy-Chowdhury, Head of Taxation at ACCA, says
‘Today’s announcement be warmly welcomed by millions of small businesses who were concerned about, or simply unaware, of MTD’s introduction and will give them and their tax advisers time to prepare. HMRC will also benefit from more time to ensure their systems are in place.
This announcement demonstrates that HMRC have listened to and sincerely engaged with concerns raised by ACCA along with a range of tax bodies and professionals.
We would like to thank ACCA members for the time they have taken to present evidence and engage with ministers on this issue.’
Chas Roy-Chowdhury adds, however, that there are issues with the new proposals,
'For voluntary MTD to be available we will still need to have all the legislation in place from the beginning. This suggests we may still have the highly compressed initial timetable, although the scope to amend and adjust before it becomes mandatory will be there (provided Parliamentary time can be found).
There is also still a worry about the timing of VAT reporting, as many of the largest businesses have a 2 year lead in time for their software systems to cope with a change of this nature, but we are now well past that cut-off date to start development and we do not even have a consultation document, let alone draft legislation.
'We must not forget the wider landscape – Brexit may fundamentally change the nature of VAT as well, meaning two major changes to VAT systems in short order.'
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