Many aspects of people’s individual and work-lives were on hold in the first half of 2020, due to the coronavirus pandemic – and the implementation of Making Tax Digital (MTD) was no exception.
MTD is a focal part of the Government’s plan to make it easier for businesses and individuals to ensure they keep on top of their affairs and avoid mistakes.
With the pandemic-related delays causing many to complete their tax returns incorrectly and past the deadlines, it prompted the Government to take a ‘dash for digital’ approach to the tax system.
During the lockdowns, when the Government prohibited in-store shopping, many consumers shopped online. This shift meant many digital systems developed remarkably.
In July 2020, the Government announced it would restart the MTD programme and released a timetable showcasing when MTD would begin for income tax. The proposed implementation date is April 2023.
Many tax experts welcomed this news, and the Institute of Chartered Accountants in England and Wales (ICAEW) warned that despite the need to make MTD a reality, it is vital not to rush the digital agenda.
The ICAEW states that for MTD to be successful, “we need to design systems that work for taxpayers and their agents. We also need to ensure that systems are fully tested before they go live.
“The introduction of the capital gains tax 30-day reporting and payment system has been a salutary lesson in what can still go wrong when you design digital tax systems.”
For information or advice on tax-related issues, please contact our expert team today.