Accountancy bodies have welcomed the news that Making Tax Digital and other proposed tax changes have been put on hold because of the general election.
Last week, the Government dropped more than half of the measures announced in the April Budget from the Finance Bill, in order to rush the legislation through Parliament ahead of the general election on 8 June. It leaves question marks over the future of HMRC's proposed Making Tax Digital (MTD) scheme, which was due to be introduced from 2018. The plans had been widely criticised and commentators now say it could now be delayed or even scrapped altogether.
There has been no Government comment about the future timetable for MTD. The Chartered Institute of Taxation has called on the Government to make a clear statement about whether (if re-elected) all of the clauses dropped will be reintroduced on the original timetable.
Making Tax Digital represents the biggest change to tax and accounting administration in a generation and currently it is not understood if the measures will come in at the next Finance Bill, post-election, be deferred until the Autumn Budget, or be dropped altogether. There needs to be certainty.
Also removed from the Finance bill were plans to cut the tax-free dividend allowance from £5,000 to £2,000 from April 2018. This news is to be welcomed, but many predict the measure will resurface after the general election, so any celebrations may be premature.
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