The controversial Making Tax Digital scheme has been removed by the government from a bill to make it law.
Many contractors and self-employed workers were concerned about the scheme from the off, as the cost of reporting and the general taxation process was expected to be more than previously for workers of this nature.
However, given the snap election and the limited time MPs would be able to review Making Tax Digital, the scheme has now been omitted from the Finance Bill 2017.
Though this omission appears to be the government taking into consideration the concerns raised about the scheme, whether it remains shelved permanently is anyone’s guess.
The general election obviously contains the possibility of a new government being in place in the not too distant future, but some industry bodies are calling on the Conservatives to elaborate on their plans in this space, particularly if voted into power once again.
The Chartered Institute of Taxation (CIOT) has asked the Conservatives to make a clear statement about whether all of the clauses that have been dropped will be reintroduced on the original timetable.
“This is a sensible, pragmatic approach from the Government and Opposition,” said Bill Dodwell, president of the CIOT. “Agreeing to leave most of the complex and controversial clauses in the Finance Bill until a post-election Finance Bill where they can be scrutinised at greater length, Since the Finance Bill was published last month, we have identified a number of changes that we believe are needed to the legislation on areas including in complicated areas such as loss relief and interest deductibility. Delaying this legislation until the summer will hopefully allow time for our concerns to be looked at and taken on board by government.”
Dodwell added that if Making Tax Digital is to go ahead at some stage, some fleshing out needs to be done.
“We particularly hope that the delay in legislating for Making Tax Digital will enable more of the framework for this huge project to be put in statute, rather than brought in through regulations, which are subject to less scrutiny and unamendable,” he said.