ICAEW harbours 'considerable' doubts over the viability of the current Making Tax Digital timetable following the disruption of the general election, the institute has told CCH Daily
Under current plans, Making Tax Digital – unincorporated businesses, landlords and the self-employed registered for VAT, will have to start reporting quarterly from 1 April 2018, while the whole process is scheduled to be completed by 2020.
But as a result of the general election’s purdah period, the turnover the Treasury’s ministers as a result and subsequent reshuffle, the institute fears the already ambitious time scale is unrealistic.
‘We are looking at approximately 400,000 businesses coming in from April 2018,’ ICAEW tax manager Sarah Ghaffari told CCH Daily. ‘With the pre-election purdah period, we’ve lost that time to communicate with HMRC. The software pilot has therefore been delayed and we’re not getting the full 12 months, which is a concern. We would be able to learn a lot from that pilot. Our position hasn’t changed. We still support of the move, but we have considerable concerns.’
The comments come after CIOT tax policy director John Cullinane raised concerns nobody is ‘seriously challenging the move to digitalisation of the tax system,’ adding that the timescale ‘remains extremely challenging’.
Jane Ellison, who had been financial secretary to the Treasury, failed to retain her Battersea seat, while David Gauke left the Treasury after seven years having been promoted to secretary of state for work and pensions. He was replaced by Liz Truss as chief secretary to the Treasury.
Philip Hammond remains Chancellor of the Exchequer, while Mel Stride takes the financial secretary post.
Alongside those concerns, there is the remaining potential of a further general election following the hung parliament, adding further uncertainty.
‘If you go back to when the Finance Bill was in the enactment process in the House of Lords and what Baroness Neville-Rolfe said, that the government will legislate for remaining provisions and at the end there is no policy change at all,’ Ghaffari said.
‘Making Tax Digital is not going away and there is nothing to suggest it won’t be happening from April 2018, but this is an opportunity for the new cabinet to take stock and think about the concerns we’ve already put in front of them.’
