29 June 2017

When it was announced earlier this year, the Government’s timetable for digitising the tax system was described as a total fantasy by Mike Cherry of the Federation of Small Businesses (FSB).

The plan to digitise the tax system, and to replace the annual tax return with quarterly updates, was subject to considerable criticism (including from the House of Lords) and accountancy and business advisory firm RSM has suggested that the inconclusive general election result creates an opportunity for a rethink.

Tax consultant Andrew Hubbard has pointed out that the Minister with day-to-day responsibility for HM Revenue and Customs (HMRC) – Jane Ellison – lost her seat in the election and her successor, Mel Stride, has only just been appointed.

Furthermore, the Democratic Unionist Party (DUP), on which the Government is likely to rely for its majority in important votes, is known to have considerable reservations about some aspect of Making Tax Digital.

In particular it has referred to the access problem that individuals in the rural parts of Northern Ireland have to high speed broadband.

"Ultimately, HMRC is right to pursue the Making Tax Digital agenda as modernising the way that the tax system operates is to everybody’s advantage," Mr Hubbard said.

However, he went on, the proposed timetable is unrealistic and will not allow proper time for a new system to be properly developed before it comes into operation.

The unexpected outcome of the general election is therefore an ideal opportunity for a pause for thought, followed by a realistic reassessment of the timetable, Mr Hubbard concluded.