Trade body welcomes government U-turn on digitisation deadline

A trade body has welcomed a government U-turn on implementing the ‘Making Tax Digital’ initiative - but it says the decision does not necessarily mean the authorities have actually listened to the concerns of the industry.

In the spring Chancellor Phillip Hammond announced the initiative, which obliges many landlords to submit tax returns digitally, would be pushed back a year to 2019 for those buy to let owners with a turnover below the VAT threshold. Now a new announcement from the government suggests it will be 2020 at the earliest.

“We are pleased that the government has finally listened to the concerns raised by the NLA on behalf of landlords who would have been dragged into a system of tax reporting rushed into being before they or it are ready” says Richard Lambert, chief executive of the National Landlords’ Association.

“While we have always supported simplifying the tax system, we were concerned by the issues raised by the Making Tax Digital programme, and welcome the changes announced by the new Financial Secretary to the Treasury Mel Stride MP, as they address exactly the points we’ve been raising since the initial announcement” he continues.

But he also adds: “However, rather than being evidence that the government is willing to work with the industry, this has come about because they no longer have the majority to push through such controversial plans.”

Making Tax Digital was originally announced by former Chancellor George Osborne in the 2015 Autumn Statement, with a view to digitising the tax system with the self-employed, small businesses and unincorporated landlords needing to keep digital records and use software to update HMRC every three months.