V7.300A Making Tax Digital (MTD)
The Treasury announced in December 2015 that the government intended to embark on a programme of bringing the digital revolution to Whitehall. The Financial Secretary to the Treasury stated that 'people in all walks of life are embracing digital technologies and the tax system should not be an exception'. Accordingly, the government intends 'to make fundamental changes to the way that the tax system works, transforming tax administration to make it more effective, more efficient and easier for people and businesses to pay their taxes'. Almost two years later, HM Revenue and Customs (HMRC) has published draft regulations, together with a draft explanatory memorandum and draft VAT Notice, for public comment. In due course, the Making Tax Digital (MTD) programme will be rolled out and UK businesses will be required to adopt the digital regime.
Note – Until the legislation is enacted, (probably after the Autumn Budget in 2018), there could be wholesale changes to the proposals. As such, this section simply focuses on the proposals without going into too much detail. Advisors will need to understand the new MTD regime if they are to assist their clients.
HMRC announced in late 2015 that businesses will be required to file all tax returns 'digitally' by 2020. The implementation of the digital regime is to be phased but digital VAT filings are to be implemented by 1 April 2019.