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Making Tax Digital

House of Lords committee calls for evidence on HMRC powers and Making Tax Digital

The House of Lords Economic Affairs Finance Bill Sub-Committee has requested contributions to aid its inquiry on the draft Finance Bill 2018. Interested parties will need to act fast as the deadline to submit written evidence is 1 October. Which aspects of the draft Finance Bill are being scrutinised?

HMRC powers. The review will focus on the powers of HMRC and the balance between it and the taxpayer. The Sub-Committee is keen to understand the extent of and the areas in which the balance of powers is inappropriate or unfair, or perceived to be. This would include any examples of HMRC’s powers operating in a way that was not the intention of the original policy. Evidence is also sought to answer questions as to how HMRC powers should be differentiated in order to deal with different problems, e.g. careless errors, sophisticated tax avoidance and deliberate tax evasion.

Making Tax Digital (MTD) for VAT. The intention is to understand the progress made since the Sub-Committee’s report on MTD for Business was published in March 2017. In particular, how prepared businesses, software providers and HMRC are for implementation of MTD for VAT in April 2019. The Sub-Committee will also investigate the costs businesses are facing and the challenges of concurrent preparations for Brexit.

The public call for evidence can be found at https://www.parliament.uk/documents/lords-committees/economic-affairs-finance-bill/draft-finance-bill-2018/Call-for-Evidence-Economic-Affairs-Finance-Bill-Sub-Committee-Draft-Finance-Bill-2018.pdf.

Preparing for MTD for VAT concerns. According to research by the ICAEW, over 40% of businesses that will be affected by the April 2019 deadline are not yet aware of MTD for VAT. HMRC has published MTD promotional material (which can be found at https://www.gov.uk/government/publications/making-tax-digital-how-vat-businesses-and-other-vat-entities-can-get-ready/making-tax-digital-how-vat-businesses-and-other-vat-entities-can-get-ready) summarising the obligations of affected businesses. It also confirms that more businesses will be able to join the MTD for VAT pilot scheme later in the year; the current pilot scheme has a limited number of participants.

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