When Theresa May called the June General Election, many of the Budget proposals were put on hold to allow for speedy passage of the Finance Bill.
This included Making Tax Digital, trumpeted by the government as a key part of its plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. In essence, it means a requirement to file quarterly returns.
Now we’re well into July, and the Queen’s Speech is out of the way, it’s time to ask: what is the future for making Tax Digital?
Well, despite post-Election uncertainty – and an extremely skinny legislative programme – Making Tax Digital (MTD) is still expected to be rolled out from April 2018 in line with its original timeframe.
As always with rules and regulations involving tax, a system of penalties is being considered for late submissions and late payments.
We do know that there is likely to be a year’s grace, so that penalties won’t be introduced until April 2019. This has to be welcome, as MTD is a major shift for those affected, individuals and businesses alike, and it will take some time to bed in.
HMRC has been consulting about what format the penalties system will take.
‘Points mean penalties’ is one option, whereby non-compliance is awarded a point, and an accumulation of points leads to a penalty.
Another option is automated review by HMRC, with penalties given based on the level of compliance – or, rather, a lack of. And a third possibility is penalty suspension, in that no penalty is awarded as long as any fault, or non-compliance, is rectified.
The jury is still out on which of the three models, if any, might be adopted. But the fact that they are still talking about it goes to show that MTD is very much on the agenda for next April and now is the time to be getting ready.
If you’re uncertain whether Making Tax Digital will apply to you, or if you are unsure of what it means and how to get yourself and your business prepared, please get in touch with the team here at Regulatory Accounting.