Spring Statement 2019: no Making Tax Digital extension for two years

Chancellor Philip Hammond has confirmed that Making Tax Digital will not be extended to buy-to-let landlords or businesses before 2021 at the earliest

The Spring Statement’s ministerial statement said: ‘The government can confirm a light touch approach to penalties in the first year of [Making Tax Digital] implementation. Where businesses are doing their best to comply, no filing or record keeping penalties will be issued.

‘The focus will be on supporting businesses to transition and the government will therefore not be mandating Making tax Digital for any new taxes or businesses in 2020.’

Previously, Theresa Middleton director of Making Tax Digital for Business at HMRC, told Accountancy Daily: ‘Mel Stride, Financial Secretary to the Treasury, previously said that HMRC would do Making Tax Digital for VAT for people above the £85,000 threshold then we would not go any further until the system had been proved to work well, and not before 2020 at the earliest, and that remains the current commitment.

‘For income tax we are keeping the pilot service going as at the moment up to a million people who are sole traders and landlords with no other sources of income can join, but the service is quite low key as without mandation over the hill there is not a huge amount of enthusiasm or interest, including from software providers.’

HMRC had previously announced that to allow for delivering Brexit responsibilities it was slowing the IT delivery of some elements of Making Tax Digital relating to income tax and corporation tax. The confirmation from the Chancellor will reassure businesses and allow time for a more measured approach to implementation and additional testing.   

Report by Amy Austin

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