Following extensive discussion with members, ICAEW has submitted its response to the Making Tax Digital: Draft Value Added Tax (amendment) regulations and notice 2018 published by HMRC on 18 December 2017. The response is available as ICAEW REP 18-2018
We have repeated many of our earlier comments, including our full support for HMRC’s digital transformation initiative, but we believe that MTD should be voluntary. Our members make this known to us at every opportunity. They and we want to help HMRC make MTD a success and welcome the assurance from the Financial Secretary to the Treasury that MTD will not be made mandatory for income tax or corporation tax until the programme is working well, but this principle should naturally also apply to VAT.
We have also made the following key points in this representation:
I agree wholeheartedly with the ICAEW response, as summarised above. Perhaps the most significant item is the first one; HMRC have stated there are significant benefits to business of MTD but few in business can work out how doing something five times a year which used to be done in one pass will be of benefit. Despite HMRC being obliged to carry out a business impact assessment, they refuse to publish the details of that for MTD so it is not possible to challenge their assumptions. The answers are simply plucked out of the air. For MTD VAT there are clearly no benefits to business, just cost, & so HMRC have taken the pragmatic step of not even trying to carry out an impact assessment, despite being obliged to do so. Perhaps it is about time ICAEW & other interested professional bodies provided a joint response to HMRC to obtain the detailed impact assessment calculations? At the moment HMRC are getting away with blatant lies & not being adequately challenged.