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BCC calls on government to delay Making Tax Digital

Thursday, 7 March, 2019

With just weeks to go before the planned switch to the government’s ‘Making Tax Digital’ (digital book-keeping), the British Chamber of Commerce (BCC), is calling on officials to delay it due to widespread lack of knowledge that it is even about to happen.

The call comes after it published the results of a survey it conducted among more than 1,000 businesses above the required VAT threshold. It found one in five (19 per cent) respondents were still unaware the switch was about to happen, claiming to only know about it in name only.

As well as there being widespread lack of knowledge about the changes, the BCC says the current timing of the new tax change is particularly misguided – planned as it is, to happen just days after the UK plans to leave the European Union.

Suren Thiru, head of economics at the BCC, said: ‘The idea to modernise the UK’s tax system is a good one, but the timing couldn’t be much worse.’ He added: ‘It’s time for government to acknowledge this isn’t the right moment to implement an overhaul of the system. A rollout of this scale is bound to have hiccups, and HMRC’s already stretched resources will be focused on Brexit and changes to tax and customs process, so there is a heightened risk for confusion and disorder.’

As well as confirming low awareness of the changes, the research also found the switchover was beginning to become a huge cost burden among those who have started making preparations. It found businesses were facing ‘significant costs’ to upgrade their systems, with 38 per cent of firms saying they had already had to upgrade, or source new accounting software in readiness for the switch-over.

Said Thiru: ‘The idea to modernise the UK’s tax system is a good one, but the timing couldn’t be much worse. In the current environment, the introduction of Making Tax Digital is an added cost and administrative burden and there still isn’t adequate understanding or preparation among businesses to make its rollout a success right now.’