Finance Bill 2017 Reinstatement & New Timetable for Making Tax Digital (‘MTD’)
The government has announced that all measures dropped from the Finance Act will be reinstated in a Second Finance Bill which will be introduced as soon as possible after MPs return to parliament in September.
All policies originally announced to start from April 2017, including the significant changes to the taxation of non-domiciled individuals and loss relief for companies, will be effective from this date.
The government has also confirmed an amendment to the implementation of Making Tax Digital (‘MTD’). Under the reformed timetable from 2019, businesses with a turnover above the VAT threshold (currently £85,000) will have to keep digital records, for VAT purposes only.
Businesses will not be asked to keep digital records, or to update HM Revenue & Customs (HMRC) quarterly, for other taxes until at least 2020 under the reformed proposals. MTD will also be available on a voluntary basis for the smallest businesses, and for other taxes.
Financial Secretary to the Treasury and Paymaster General Mel Stride said:
“Businesses agree that digitising the tax system is the right direction of travel. However, many have been worried about the scope and pace of reforms. We have listened very carefully to their concerns and are making changes so that we can bring the tax system into the digital age in a way that is right for all businesses.”
The changes to MTD follow widespread concerns voiced about the initial implementation timeline, with the House of Lords Economic Affairs Committee saying the previous timetable for implementation of MTD was “rushed” and that many small firms were not ready to cope with the additional administrative and financial burdens of digital taxation.
The changes will be legislated as part of the second 2017 Finance Bill which is to be introduced after the parliamentary summer recess.
For further information or any queries you may have regarding the above, please do not hesitate to contact John Neighbour (Tax Director), Amy Armitage (Tax Manager) or any other member of the HB team on 01992 444466.