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There can be few who were upset at the recent announcement from the UK Government. No, not that UK General Election thing. The announcement that MTD (the Making Tax Digital initiative) had been postponed. Legislative changes are disruptive, but a whiplash legislative about-turn can be even more so.
This one made front page news, from the Telegraph to the Daily Mail, broadsheet to red top and everything in-between. Even here, at Springfords blog and news, we’ve taken a dive into the murky waters of MTD, so that you don’t drown in the digital depths. It’s been the subject of acres of newsprint and gigabytes of online comment. Now it’s all in hiatus.
Late in April, the binary bombshell that Making Tax Digital had been dropped from the Finance Bill came along , like a hot potato from Chancellor Hammond’s hands. The Man at Number Eleven, finally succumbed to the shock and awe bombardment from a coalition of taxpayers, business groups and senior political figures across all sectors and political persuasions.
Hurrah for common sense said a multitude of commentators and commercial interests. Effigy burning lynch mobs up and down the land retreated from tax offices, only to go home and prepare for dancing in the streets. Here at Springfords HQ, our celebrations were somewhat mooted by the experience of having seen it all before. We’re not quite going back to the repeal of the Window Tax (1851 - handy for the Great Exhibition and the Crystal Palace), nor the introduction of peace-time Income Tax (1842 since you ask, and which is still technically a temporary measure by the way), but in living memory we have seen chancellors visibly change polarity, such has been their abruptness to yield to common sense.
That at least was the opinion of most accountancy bodies, who roundly applauded the move in the press.
This massive change to the way we all report our tax has been staved off at the last minute. The universally irksome quarterly returns regime of MTD was due to start rolling out in April 2018, with pilot schemes beforehand. The advance planning of business people, tax planners and finance controllers up and down the country has now careered to a screeching halt, as the Hammond tax bubble car performs a precarious and unsignalled manoeuvre, mere feet in front of their speeding corporate juggernauts.
Needless to say, there’s already speculation that further changes could be afoot just after the General Election. Ah, yes, the Election - but that’s a story for another time. So there will be plenty of future opportunity for debate and amendment, before any final decision is made on MTD.
We can’t read the mind of the Chancellor, though all our clients would be in clover if we could. We can however help you all join our self-preservation society, by taking on the joint responsibility for planning for the future, whatever that future might be.