Select Committee's findings
The Treasury Select Committee has urged HMRC to implement a series of wide-ranging pilots in order to better test the government’s plans for the new digital tax initiative, Making Tax Digital (MTD), before it becomes compulsory for the majority of taxpayers.
The report found that, while the government had already carried out trials of the new initiative, those businesses which took part had done so at HMRC's invitation.
The Committee stated that comprehensive pilots of MTD are 'essential', and that these need to be designed to collect information over the entire reporting cycle.
It also suggested that an evaluation of these pilots should be carried out before the full implementation of the scheme which is expected, for all but the smallest businesses to be implemented from April 2018 onwards.
Andrew Tyrie MP, Chairman of the Committee, said:
'Without sufficient care, MTD could be a disaster. Implemented carefully, with long transitional arrangements where necessary, and, having drawn on information from fully inclusive pilots, MTD could be designed for the benefit both of the economy and of the tax yield. But with a rushed introduction, it will benefit neither.'
MTDfB will still be phased in from April 2018. We will keep you informed of developments.