Lords to re-examine MTD plans » SMEInsider

Lords to re-examine MTD plans

Following a worrisome report last week into the potential ramifications of the government’s planned Make Tax Digital initiative, the House of Lords has announced it is to set up a sub-committee to look into its effects.

The Lords says it wants to look again at the scheme, which has at its heart a major reform of how small businesses – interact with HMRC, making the progress smoother by taking it all online and in real time.

However, despite initial enthusiasm for the reforms there have mounting fears that in fact it will produce an unwieldy and inefficient system for all concerned. Last week the influential Commons Treasury select committee issued a report voicing its fears

As a result, this morning the Lords press office said it wanted to look again – in detail – at the proposals, and highlighted several areas of clear concern. It says it wants, in the course of its investigation to look at:

  • Evidence underlying the case for the Making Tax Digital proposals and their suggested impact.
  • Evidence base for mandatory digital reporting, in particular the potential impact on the ‘tax gap’ and for HMRC resources.
  • Scope of the exemptions and measures to help the digitally excluded.
  • Robustness of the proposed timetable from the perspective of each of the groups affected, including the software industry, different taxpayer groups (such as small businesses and landlords), intermediaries and HMRC.
  • Adequacy of the proposed measures to simplify the calculation of taxable profits and basis periods and the timing of their introduction.
  • Consequential revisions to the penalty regime.

The committee is calling for written evidence, which can be submitted here.