The House of Lords, which is the Upper House of UK Parliament, have called for a minimum of 1-year delay to the implementation of Making Tax Digital (MTD).
They claim that HMRC have neglected their responsibility to small businesses and that the costs to implement the new system will exceed those outlined in HMRC’s impact assessment. They also stated that low awareness from affected businesses and difficulty in the software market should also warrant an extension of this deadline.
As stated in our previous article, MTD will require VAT registered businesses to use special software to provide summary tax data directly to the tax office electronically. This data will be used to automatically generate tax records, instead of manually calculating and filing a VAT return.
For the full report published by the committee please click here.