Contractor body echoes Lords’ call to delay MTD

A call by a House of Lords committee to delay Making Tax Digital’s April 2019 start date for VAT purposes has been backed by a contractor trade group.

The Association of Independent Professionals and the Self-Employed (IPSE) said it supported the committee’s recommendation, made to HMRC, on three distinct grounds.

Firstly, many small company-owners who stand to be affected by MTD “simply don’t know about the new requirements”, IPSE said, agreeing with the Lords that lack of awareness is a problem.

Secondly, the costs for implementing digital tax accounts could be higher than government predictions, warned the association’s director of policy Simon McVicker.

Thirdly, a “large number” of very small businesses still keep paper records which, although ‘surprising’, indicates accessibility to be an obstacle to a successful April 2019 launch.

Outlining small firms' overall ‘resourcefulness’ as the third reason in favour of a delay, the association added that such tiny traders typically lacked internal accounting or financial staff.

“Therefore [they’re] at greater risk of being disrupted by the new reporting requirements,” Mr McVicker said.“[And] we’d welcome a further delay to give our smallest businesses some extra breathing room.”

IPSE supports digitisation of the tax system -- in principle, but like the Lords committee, says it is “worried about the speed of the [proposed] implementation.”