MTD upheaval clash
Following the recent House of Lords report on Making Tax Digital, LSCA Taxation Committee Chair Adrian Mansbridge weighs in behind calls to make MTD voluntary amid other tax process upheavals.
In November 2018, the House of Lords reported that, in their view, the introduction of Making Tax Digital (MTD) should not be mandatory but voluntary, at least initially. ICAEW agreed.
These views are based on evidence. No one thinks that MTD is a bad idea, but if 40% of businesses are not aware of it, a voluntary approach makes sense, perhaps for two or three years.
I support this view by taking the example of a trader in the construction industry. That trader faces implementing MTD for VAT from 1 April 2019, so the whole accounting process may need changing. The trader also faces being sucked into the new VAT ‘reverse charge’ system from 1 October 2019, which is due to apply to the construction industry.
And let us not forget the new IR35 rules that may apply to ‘one-man bands’ in the private sector.
So, one important part of our economy is facing a wave of change to its administrative processes. As I write this, we have no idea what is going to happen with Brexit and what impact that may have on getting hold of materials for building projects or the man and woman power needed to undertake required work.
The government is responsible for pushing through changes to taxation, but one has to ask if anyone actually considers the impact of so much change on a single industry that covers a small one-person business right through to very large corporations.
The work that we do at the LSCA through our Taxation Committee and voicing our opinion directly to the authorities, as well as working alongside our colleagues at ICAEW, provides an important voice to try and get across the practical and technical problems of introducing change.
We do not oppose change, progress or the use of technology. It is welcomed. But common sense has to be used.
Adrian Mansbridge is Chair of the LSCA Taxation Committee.
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