HMRC have announced their decision to delay plans to introduce digital tax services for individuals, as its focus shifts to Brexit amid our impending exit from the EU.
The shift to digital begun in early 2016, and was intended to simplify tax payments for all, whilst addressing the £34bn tax gap that currently exists. The transition to a fully digital system was anticipated for 2020.
However, progress in the Making Tax Digital scheme is now on hold until further notice, as HMRC reallocates its resources to more pressing issues.
Some modifications will still go ahead. HMRC have confirmed that MTD for VAT is still taking effect from 1st April 2019, meaning plans for registered businesses over the VAT threshold (currently £85,000) remain on track.
However, MTD for income tax and corporation tax for individuals is on hold, with no implementation date yet confirmed. This also means a halt on changes to Simple Assessments and real-time tax code changes until at least 2020.
It’s hoped that the MTD system will eventually revolutionise the way tax payers interact with the tax system. But exactly when this will happen remains unclear.
If you would like any more information regarding the MTD scheme, or have any other tax related queries, please get in touch with one of our experts.
