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The Government’s long-awaited responses to six consultations about Making Tax Digital (MTD) which were originally opened in August 2016 were published at the end of January.
Despite ongoing criticisms regarding the proposed short MTD timescale, HM Revenue & Customs (HMRC) confirmed that the project will not be delayed.
This means that mandatory quarterly digital reporting will be phased in for self-employed individuals and landlords in April 2018, with small and medium-sized enterprises (SMEs) soon to follow.
By 2020, “most businesses, self-employed people and landlords will be able to keep track of their tax affairs digitally and update HMRC quarterly,” according to the Revenue.
Key highlights and/or changes outlined in the Government’s responses include:
However, the Government has said that some of the above proposals could be subject to further changes.
HMRC’s Director General, Jim Harra, said: “There were more than 3,000 responses to the consultations and I’d like to thank everyone for their time and effort.
“Making Tax Digital will help businesses to get their tax right first time; it will help reduce the likelihood of errors, lower the chance of unwelcome compliance checks and give them greater certainty that they are getting things right”.
Financial Secretary to the Treasury, Jane Ellison MP, added: “As most consultation responses acknowledged, a digital tax system is a logical step in an increasingly digital world.
“For the majority I believe that Making Tax Digital will transform the way businesses, landlords and the self-employed interact with the tax system for the better, by providing clarity and certainty over their tax affairs throughout the year and making it easier for them to get their tax right first time”.