Back in the autumn we were promised a response from HMRC to their summer 2016 MTD consultations during January 2017.
Well the days have gone by, and about 4pm this afternoon an email from HMRC arrived announcing the response was up. Well, its still January, just.
There are six responses and we need to pick through them, but here are the headlines:
- spreadsheets are reprieved – business can still use spreadsheets rather than other software, but the spreadsheets will need to be compatible with something, HMRC haven’t said what. This is a big concession, and potentially quite useful
- three line quarterly submissions for businesses below vat threshold – something and nothing, as the same work has to be done to get there either way
- government are considering further issues around the exemption threshold, currently £10,000 turnover – most people suggest it should be aligned with the VAT threshold
- government are considering issues around deferring the start date for small businesses, currently 5 April 2018 for sole traders and partnerships, and 5 April 2020 for companies
On the latter two points we are promised a decision later this year when draft legislation is issued – that will probably be the summer, and this isn’t really acceptable for changes of this significance and the current already short proposed lead in time.
So there are still many questions. I’ve been in correspondence with our local MP, who in turn has enquired of the Minister responsible, Financial Secretary to the Treasury, whose reply was beyond anodyne. I shall be writing direct to the Chancellor in the next few days, as the whole proposed pace of change is reckless in the context of a reducing HMRC staff / infrastructure base and the uncertainties around the tax implications arising from Brexit. Thats not to say the MTD idea is a bad one, its just being dangerously rushed.
For a summary of MTD, see our guide here