House of Lords seeks further MTD evidence
The House of Lords economic committee has called for more evidence on the Making Tax Digital draft clause, despite the draft law not actually being published yet.
HMRC has earmarked the end of January as the release date for the much-anticipated Making Tax Digital consultation document response. The relevant draft clause is expected to include, amongst other things, provisions on the timing of the introduction, the scope of exemptions and the mandate of accounting software.
The House of Lords call for evidence gives affected individuals another opportunity to address the scope of the digital project. Realising that the Making Tax Digital proposal are subject to change, the committee acknowledged that the focus of their inquiry may also change.
The sub-committee is looking for evidence aligning with the six key areas covered in the consultation documents: the impact of Making Tax Digital, evidence for mandatory digital reporting; and once the response has been published, the scope of the exemptions, the proposed timetable, the taxable profits and basis periods, and the penalty regime.
The sub-committee is particularly interested in how other tax jurisdictions have launched similar projects, and wants statistical evidence on how these plans will affect businesses, landlords and taxpayers.
But the sub-committee has set a strict timetable for accepting responses before it holds a public hearing next month. All written evidence on the general and background issues should reach the sub-committee by 3 February. Considering the slim window of time available once HMRC publishes its response, all feedback about the draft clauses should reach the committee by 15 February.
The House of Lords will not be the first to investigate the merits of MTD. The Treasury Select Committee has already scrutinised the government’s ambitious digital plans. In a report published this month, the select committee expressed its reservations about the project, raising concern over the exemption threshold, the timescale, the free software reassurance, and the costs and benefits.
The committee’s report comes after it sought evidence from accountancy representative bodies and the federation of small businesses.
HMRC released six consultation documents last August and received around 3,000 responses.
The sub-committee requests short written evidence to be submitted online, with longer submissions more than six pages to include a one page summary.
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