I wrote the following article for Informanagement recently. A discussion of the likelihood that MTD is permanently shelved.
It’s not often that national events impact the work of a tax advisor, with the exception, of course, of the annual changes imposed by the Finance Bill.
But now, we do have an additional event to factor into the advice we give clients – the surprise election in June and the consequent cull of a good part of the Finance Bill 2017.
In parliamentary parlance, a large section of the Finance Bill has been “washed up”, the idea, to shorten the Bill so it can be passed before the June election.
Unfortunately, one of the more significant sections of the Bill, dealing with MTD, has been deferred. Or has it been cancelled, or as Rebecca Cave’s article on the Accounting Web is titled “MTD law is shelved in wash-up”.
What do we say to clients? Glory be, HMRC have abandoned MTD, or nothing has changed, the legislation will be reintroduced after the election. Obviously clients, and many practitioners, will be hopeful that shelved means scrapped. But the evidence seems to point to a straight forward timing issue. If, as is likely, Mrs May returns to Downing Street after the election, will we see a Finance Bill (No2) 2017, restating the “wash-up” clauses and schedules, and any other items that Philip Hammond wants to throw into the mix?
HMRC are presently trialling MTD with a number of tax payers and their advisors, the code is written, the systems deployed. The aim, presumably, to fine tune the processes before the expected launch for over-VAT-limit unincorporated business from April 2018.
Again, what do we say to clients? Accountants tend to be a conservative bunch, so our guess is a steady as you go approach. We should definitely not be driven by media platitudes, “shelved”, “withdrawn” etc. Nothing is certain apart from death and taxes, but taxes are determined by legislation and until we see MTD firmly planted in a Finance Act there will always be uncertainty. For now, surely clients should proceed on the basis that MTD will be implemented as scheduled, as we await the outcome of the election and future tax legislation to clarify matters.
For practitioners that are still looking for a sense of direction on the implications of MTD, my support pack is still available.