In this week’s Money Matters – Ask the Experts column, from Goldwyns Accountants, based in Southend, Thomas Robinson, a chartered accountant and manager at the company at the company, provides his thoughts on the state of play regarding Making Tax Digital.

Dear Goldwyns - I read your recent column about Making Tax Digital and am concerned that it will affect me soon, but I don’t know much about it. When will I find out where I stand?

Thomas Robinson explains:

Shortly after our recent column discussing HMRC’s intention to introduce quarterly reporting under their Making Tax Digital (MTD) plans, they quietly announced that most of the contents were being shelved. MTD will now only apply to businesses for VAT reporting from April 2019.

Although the current political climate has made many of us unfazed at yet another U-turn, this about-face did not follow the standard process. Whereas announcements for a National Insurance increase, a social care cost cap and foreign worker quotas were withdrawn following brief but fierce media commentary and campaigns, HMRC did not face the same barrage of criticism.

Although the plans had many detractors who have been attempting to highlight the numerous costs and difficulties the new system would create ever since it was first mentioned, their complaints were mostly only covered in relatively specialised press and never gained mainstream awareness. Although Treasury Select Committees and organisations such the Institute of Chartered Accountants in England and Wales (ICAEW) and the Federation of Small Businesses (FSB) can hold sway over the Government at times, it does not fully explain why HMRC finally relented.

In part, their objections seem likely to have had an effect  but the Government was also forced to act as it attempts to place all focus on Brexit. A lack of time to discuss the plan in Parliament before the election had already suggested a brief delay and it looks unlikely that time will be found to revisit it in the next few years.

However, the killer blow may actually have been forced by HMRC’s own staffing levels – the proposed system would have required a large digital skills workforce that HMRC may not possess. It has also been suggested that HMRC’s recent changes in rules to deter the public sector from using people registered as their own company, rather than an employee, further reduced their digital development workforce.  

This may raise a wry smile from some, but it also leads to a crucial question – will HMRC ever be able to implement their digital plans? They may only be delayed at present, but there is no way of knowing for how long the plans will be ‘on ice’. As far as you are concerned, it is business as usual; for the time being at least.

This article was first published in the Southend Echo on 5 September 2017.