Representatives from CIOT, ICAEW and ACCA were up before the Committee chaired by Andrew Tyrie MP today to review issues raised in the Finance Bill 2017 just after news broke that the prime minster Theresa May had called a snap general election.

Tyrie coerced the institute’s tax experts on the viability of rolling out Making Tax Digital in the timeframe set by the government and supported by HMRC, with the first tranche of businesses set to start quarterly reporting from April 2018.

The witnesses were under pressure to agree that the plans should be parked and not included in the forthcoming Bill.

Tyrie asked whether the rollout plans should be ‘put into cold storage’, adding that ‘there is no option to phase the measures, either they are parked or they go ahead’.

Bill Dodwell, president of CIOT; Nick Parker, deputy president of ICAEW and Chas Roy-Chowdhury, head of tax at ACCA were forced to give either a yes or no answer, and despite indications that they would have preferred to see the ‘phase’ option, they agreed that Making Tax Digital should be ‘parked’.

It was not clear from the hearing whether the MPs were calling for a temporary delay until after the general election, or whether the measure should be held over for a future Finance Bill. The Committee will report back to the Treasury with its recommendations on 19 April.

The Finance Bill hearing also probed the lack of detail on the software provision for Making Tax Digital, with no software companies actually up and running with working software which could integrate spreadsheets into HMRC’s quarterly reporting system.

When asked about the readiness of IT companies to sell Making Tax Digital compliant software, Dodwell said: ‘There is no announcement about any software to make a spreadsheet compliant with Making Tax Digital – we just don’t know how that is going to work.’

He added: 'If companies are forced to rush out software, there will be a rush of botched software.'

Despite the move to roll out quarterly reporting from 2018, the industry is divided on whether it is really necessary, with Kit Malthouse MP questioning whether it was simply a winner for accountants who will be able to charge their clients more to comply with the new system.

Roy-Chowdhury said: 'Accountants cannot charge any more for their services as small businesses cannot afford any more for their fees, so either they will have to swallow the fees or sack clients.'

Parker went so far as to say that the ICAEW is still not convinced about the overall plan. He said: ‘We are still questioning why you have to report on a quarterly basis, we don’t believe it is actually going to improve the system. It is very high level at the moment given it is something that is coming in in a year’s time. How HMRC is going to link its software into random spreadsheets I have no idea. We support the concept of Making Tax Digital but it needs to be looked at in a more pragmatic way. We are anvious that it works, but not sure that it will work with the rush to implementation.’

HMRC is banking on the fact that around 400,000 larger businesses already do quarterly reporting due to VAT compliance, but this did not fill the gathered MPs or tax experts with confidence.

Dodwell said: ‘Many of those larger businesses will have accounting software but there are lots of different packages around and it is really uncertain whether all the packages these businesses use will be able to make the quarterly reporting deadline.’

HMRC officials will be up before the Committee on 25 April to discuss Making Tax Digital and progress to date. This may provide some clarity on the many unanswered questions from software provision to the minimum threshold and administrative costs.