The House of Lords Finance Bill Sub-Committee (FBSC) has made a call for evidence in respect of Finance Bill 2017 provisions for Making Tax Digital (MTD).
The 2017 Finance Bill is expected to contain MTD provisions that affect businesses and private landlords. Based on HMRC’s consultations in 2016, the draft clauses may include:
- The obligations of taxpayers covered by the new scheme, including any proposal to mandate the use of computer software or ‘apps’ to keep their business records and to provide quarterly returns of this data to HMRC.
- The timing of the introduction of these provisions, starting from April 2018.
- The possible ‘points-based’ penalty regime which will apply to failures to comply with the new obligations.
- The scope of any exemptions for the smallest businesses and landlords and for the ‘digitally excluded’.
- Any proposed simplifications to the rules governing tax accounts drawn up by small businesses and partnerships and property businesses.
- An in-year voluntary pay-tax-as-you-go scheme based on digital records and updates.
Subject to publication of the relevant clauses, the inquiry will consider the extent to which the measures proposed in the draft legislation will contribute to the modernisation, simplification and efficiency of the tax system, as well as their impact on the compliance and other costs borne by taxpayers, particularly smaller businesses and private landlords.
The focus of the inquiry may alter should the scope of the draft provisions differ substantially from the proposals consulted on. Subject to this, the FBSC invites evidence on the provisions contained in the draft clauses and in particular the following topics:
1) The evidence underlying the case for the Making Tax Digital proposals and their suggested impact. The FBSC would be interested in statistical and other evidence, including that drawn from the experience of other tax jurisdictions, relevant to an assessment of the potential impacts of these proposals on businesses, landlords and other taxpayers.
2) The evidence base for mandatory digital reporting. In particular the potential impact on the ‘tax gap’ and for HMRC resources.
3) The scope of the exemptions and measures to help the digitally excluded.
4) The 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.
5) The adequacy of the proposed measures to simplify the calculation of taxable profits and basis periods and the timing of their introduction.
6) The consequential revisions to the penalty regime. The sub-committee would welcome evidence from businesses, landlords and other affected individuals about the draft clauses.
Making Tax Digital: Index
Confused by HMRC's Making Tax Digital (MTD)? What does Making Tax Digital really mean? How will it affect you? Does MTD mean quarterly reporting? Is my business exempted from Making Tax Digital?