BCC calls for delay to MTD

The British Chambers of Commerce (BCC) has called on the Government to delay the implementation of Making Tax Digital (MTD) until the start of the 2020/21 tax year, saying that an “alarmingly high” proportion of its 75,000 members have little or no awareness of the initiative.

Last month, MPs were given a list of 39 projects which may have to be delayed so that issues surrounding Brexit could be focused upon, and MTD was one of them. Under the MTD scheme, VAT-registered businesses would need to send their VAT returns digitally to the Revenue by April 2019. Currently, 25 per cent of UK businesses are still using manual or spreadsheet record keeping.

However, according to the BCC’s member research, almost a quarter of firms have never heard of it and only 10 per cent know a lot of details” about it. Meanwhile the vast majority – almost 70 per cent – said they know of the scheme only by name or just some details about it.

According to the BCC’s research, the general business ignorance of MTD goes in tandem with enduring dissatisfaction among businesses with HMRC’s service. 60 per cent of respondents to the BCC survey gave the tax authority a rating of three or less out of five.

A spokesman for the membership organisation said that ministers must “face up to the reality” of the pressures facing HMRC and delay the introduction of MTD for all businesses until the next financial year.

He added that this would allow the Revenue to focus its immediate attention on supporting businesses in the UK through the Brexit process, which he said must be “a key priority”.

However, not everyone agreed with the BCC’s call. Software house, Sage, has said that a delay to the start of MTD for VAT by up to two years would be “a backward step” in helping thousands of businesses on their digital journey.